In the state of New Jersey, insurance fraud ranks as the second largest white-collar non-violent crime, trailing only behind tax evasion. A report from insurancefraud.org indicates that insurance fraud amounts to a staggering $308.6 billion annually. This not only results in a significant increase in insurance costs but also places a higher premium burden on policyholders.
Prosecutors responsible for handling insurance fraud cases emphasize in their report that the scale of perpetrators involved in insurance fraud is increasingly vast, severely impacting the normal operation of the insurance industry.
An investigation into insurance fraud reveals that nearly 9% of respondents do not view insurance fraud as a wrongdoing or criminal activity. They perceive it either as insurance companies extorting people or as rightful compensation for having paid sufficient premiums. Meanwhile, a significant proportion of respondents (28.6%) hold the viewpoint that insurance fraud is either not truly a crime (8.5%) or constitutes a business practice without genuine victims (20.1%). Additionally, defenders of insurance fraud may argue on behalf of deceiving insurance companies, viewing it as a victimless crime.
For the insurance industry, agents and companies must be prepared for the increasing frequency of claims. The emergence of AI tools brings about a series of complex issues. It not only creates more sophisticated fraudulent content for phishing but also has the capability to steal sensitive data such as insurance policy accounts, thereby affecting the accuracy of insurance assessments and impacting claims payout rates.
Of particular note is the fact that AI has become a powerful tool for insurance fraud. For instance, some insurance companies no longer accept photo claims as they could be doctored. Falsified photos depicting damages to specific makes and models of cars, which are not genuine, can be used to extract claim payments. AI fraud also extends to life insurance scams. Attackers leverage AI to easily mimic a person's photo and voice, fabricating a wealth of data to bypass insurance companies' voice recognition technologies and initiate policies for non-insured individuals or non-beneficiaries.
In the face of numerous threats posed by AI, the insurance industry needs to strengthen preventive measures and enhance fraud detection capabilities. Additionally, cooperation with technology companies is crucial to jointly address this challenge.