A new study from Verisk highlights how AI-powered editing tools are contributing to a measurable increase in insurance fraud. The research points to changing consumer behavior, growing ethical concerns, and challenges for insurers as manipulated digital content becomes more common and more sophisticated.
Verisk, a global data analytics and technology provider for the insurance industry, conducted the State of Insurance Fraud study using surveys of 1,000 U.S. consumers and 300 insurance claims professionals. The findings show that both consumers and insurers are navigating a rapidly shifting landscape shaped by artificial intelligence.
Consumers Increasingly Open to Digital Manipulation
The study found that 36% of consumers would consider digitally altering an insurance claim image or document to strengthen their case, even if doing so violates insurer rules. This willingness is higher among younger generations. Specifically, 55% of Generation Z and 49% of Millennials said they would consider making such edits, compared with 28% of Generation X and 12% of Baby Boomers.
In addition, 41% of consumers said they know someone who has used AI editing tools to alter or create media for financial gain. That figure rises to 64% for Generation Z and 54% for Millennials. Meanwhile, 62% of respondents believe people use AI tools to manipulate insurance claim documents 'often' or 'very often'.
The study also examined how consumers view specific types of edits. While 52% said adjusting brightness or contrast is acceptable and 49% approved of cropping out background elements, a smaller but notable group supported more serious alterations. For example, 15% said exaggerating damage is acceptable, and 13% said creating images of damage that never occurred is acceptable.
AI Tools Make Fraud More Accessible
AI-powered editing tools are now widely available and easy to use. As a result, they are becoming part of everyday digital behavior. Among consumers who have used these tools, 44% described their edits as “very realistic,” showing how convincingly altered content can resemble authentic materials.
This accessibility is contributing to a rise in digital insurance fraud. Nearly all insurers surveyed, 98%, said AI-powered editing tools are driving an increase in manipulated media. Additionally, 99% reported encountering AI-altered documentation, and 76% said these submissions have become more sophisticated over the past year.
Insurers Report Growing Detection Challenges
As digital fraud becomes more advanced, insurers are working to improve detection capabilities. The study found that 65% of insurers use third-party AI-based detection tools, and 50% use internally developed AI systems.
However, confidence in these tools varies. While 58% of insurers said they are very confident in detecting edits to real images or videos, only 43% expressed strong confidence in assessing the authenticity of digital media at scale. Confidence drops further when evaluating deepfakes, with just 32% saying they are very confident in identifying them.
At the same time, 66% of insurers believe digital media fraud goes undetected often or very often across the industry. These findings suggest that detection capabilities are not keeping pace with the increasing sophistication of AI-generated content.
Broader Impacts on Insurance Systems
The study shows that both consumers and insurers expect digital fraud to affect the broader insurance system. Among consumers, 69% believe fraudulent claims will lead to higher premiums for all policyholders over time. In addition, 42% identified rising premiums as a top concern, while 36% expressed concern that legitimate claims could be delayed or denied due to suspicion of manipulation.
Insurers also anticipate operational and financial impacts. Looking ahead three to five years, 48% expect increased adoption of technology solutions to address fraud. Additionally, 45% foresee stricter documentation requirements, 36% anticipate greater strain on claims teams, 35% expect longer claim cycle times, and 35% predict higher premiums for consumers.
Study Highlights Need for Stronger Systems and Collaboration
The findings indicate that AI-driven fraud is affecting multiple aspects of the insurance process, including claims handling, fraud detection, and policyholder trust. As manipulated media becomes more common, insurers face pressure to improve systems, integrate detection tools more effectively, and enhance visibility across claims workflows.
The Verisk study concludes that addressing these challenges will require more connected systems and shared intelligence across the industry. It also emphasizes the importance of maintaining fairness and efficiency in the claims process while addressing the growing threat of AI-driven manipulation.
About Verisk
Verisk (Nasdaq: VRSK) is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud, and make informed decisions about global risks, including climate change, catastrophic events, sustainability, and political issues. Through advanced data analytics, software, scientific research, and deep industry knowledge, Verisk helps build global resilience for individuals, communities, and businesses.
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