Insurers warn about fake and manipulated images being used in claims

Some people are using advances in technology to try to make claims for incidents that may never have happened in the first place, according to industry experts.

Whereas, previously, fraudsters may have physically staged a “crash-for-cash” vehicle incident on the road, technology can now be used to falsify registration numbers, damage, or supporting documents.

In some cases, the actual vehicles may have already been written off.

Scott Clayton, head of claims fraud at Zurich UK, said: “Just as we use technology to help us detect fraud, dishonest people are increasingly using technology to try to get us to pay out for something that may not even have happened.

“This is a pocket of activity that is definitely growing. Technology has got more sophisticated in recent years, which is creating new opportunities for people or groups to submit fake claims.

“This means that we, as insurers, have to keep up with technology and be alive to some of the new and emerging ways that people will try to make a fraudulent claims.”

Insurer Allianz recorded a 300% jump in incidents where apps were used to distort real-life images, videos and documents between 2021-22 and 2022-23.

Matt Crabtree, head of financial crime intelligence and investigation strategy at Allianz, said: “There is some fantastic technology out there, which is making our lives so much better in many ways.

“However, the sad reality is that fraudsters are using this same technology for their own illegal purposes and to target innocent members of the public to make a profit, with total disregard for the impact to the victim.

“Although insurance fraud is evolving all the time, so are our robust controls and systems, which are designed to spot emerging trends. Our highly trained investigators then root out those who are trying to exploit the system, in order to protect honest customers and keep costs down.”

Insurance giant Aviva said that one of its investigators had stopped a theft claim in its tracks following suspicions around an image of a watch, valued at more than £20,000.

While conducting in-depth checks, she found an image online of an identical watch, reading the exact same time to the second. Aviva subsequently declined the claim.

In general, Aviva uncovered more than 9,250 instances of fraud in 2022, saving £120 million in bogus payouts.

The insurer has previously identified signs that organised whiplash fraudsters were moving away from motor injury fraud and into fraud related to the repair and replacement of damaged vehicles.

Insurance costs have jumped during the cost-of-living squeeze, with insurers facing their own cost pressures from rising charges for repairs, raw materials and replacement vehicles.

According to recent figures from the Association of British Insurers (ABI), the average price paid for comprehensive motor insurance was about a third (33%) or £157 higher in the first quarter of this year than a year earlier.

Based on analysis of policies sold, the typical price paid in the first quarter of 2024 was £635, marking a 1% increase on the previous quarter, the ABI said previously.

The association has also said that insurers are continuing to absorb growing costs, with the average claim paid rising to a record £4,800.

Mark Allen, ABI head of fraud and financial crime, said: “Protecting insurance customers against the impact of fraud remains an industry priority.

“Insurers are alive to the various tactics fraudsters deploy and use sophisticated software to detect false or edited images.

“The use of technology is a key part of the insurance sector’s counter fraud weaponry and there will be no let-up in the industry’s prevention and detection of fraudulent claims, and enforcement against insurance fraudsters.”