Fake damage and imaginary watches - how AI images are being used in insurance scams
Summary
Insurance companies are seeing more fraud cases involving fake or altered images created using artificial intelligence (AI). Cardiff-based insurer Admiral reported a 71% increase in fraud in 2025, partly due to customers using AI to fake or exaggerate damages in claims. The insurance industry is working to develop technology to detect and prevent these AI-based scams.Key Facts
- Admiral, a Cardiff-based insurer, recorded a 71% rise in insurance fraud in 2025 compared to 2024.
- AI software is being used by some customers to create fake images of damage or expensive items, like watches, for insurance claims.
- Examples include AI-generated fake car damage, manipulated number plates, and invented watches submitted as proof.
- The Insurance Fraud Bureau warned that both individual customers and organized crime groups use AI to commit fraud.
- Insurance companies use anti-fraud software that can detect AI-generated or altered images to reject fake claims.
- Industry groups are collaborating to share knowledge and develop better ways to fight AI-related fraud.
- People caught submitting false claims risk having their insurance canceled, claims rejected, and may face criminal prosecution.
- Insurance fraud leads to higher premiums for all customers, increasing the overall cost of insurance.
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