2026-10-07 · Source: Insurance Business Australia
Summary in 3 Points • Insurers are facing a sharp rise in AI-assisted fraud, with identity fraud costing hundreds of thousands per incident. • Gallagher Bassett's study found 72% of Australian insurers reported an increase in AI-generated fraudulent claims. • The ICA detected $560 million of opportunistic fraud in motor and property claims in 2023, with undetected fraud costing $400 million annually. --- Insurers are grappling with a significant rise in AI-assisted fraud, as highlighted by Jeremy Jawish from Shift Technology. Identity fraud is particularly concerning, costing carriers hundreds of thousands of dollars per incident, with many claims being filed under false identities. A recent Gallagher Bassett study revealed that 72% of Australian insurers have observed an increase in fraudulent claims involving AI-generated documents, indicating a growing trend that could impact premium affordability. The Insurance Council of Australia (ICA) reported detecting $560 million in opportunistic fraud in motor and property claims in 2023, with an estimated $400 million slipping through undetected annually. This undetected fraud contributes to rising premiums for honest customers. The ICA is now collaborating with insurers to build a national fraud detection platform, aiming to share fraud patterns and improve detection rates, which currently sit at around 1% in Australia compared to 5% in the UK. This initiative reflects a shift towards collective action in combating fraud in the insurance sector. Insurers are increasingly facing AI-assisted fraud, with identity fraud costing hundreds of thousands per incident, impacting claims processing and premium affordability.
Insurers are increasingly facing AI-assisted fraud, with identity fraud costing hundreds of thousands per incident, impacting claims processing and premium affordability.