Insurance document fraud moves upstream

Document fraud is moving beyond claims and into underwriting as AI gives fraudsters new ways to exploit insurers. Vicki Summerhayes reports

From fake-damage imagery and forged repair invoices to number plate swaps on photos of genuine accidents, insurers are reporting record levels of claims document fraud driven by increasingly sophisticated AI manipulation.

While claims remain the primary target, document fraud is now increasingly moving upstream to quote and policy inception. Recent data from Synectics reveals a 31% increase in the detection of fake documents at policy stage in the year to June 2026, with no-claims-bonus documents, utility bills, bank statements, driving licenses, and V5 records just some of the fabricated documents being encountered by insurers.

There have always been fraudsters presenting fake documents, but AI has hugely increased the volume that firms are dealing with.

Michael Richards, Zurich

“Document fraud is now happening at all touch points in the policy lifecycle, including onboarding and mid-term adjustments. It isn’t just happening at the point of settlement,” notes Carina Harrison, insurance fraud solutions consultant at Synectics.

AI is undeniably supercharging document fraud. “There have always been fraudsters presenting fake documents, but AI has hugely increased the volume that firms are dealing with,” says Michael Richards, fraud investigations team leader at Zurich. “The widespread availability of editing programmes means some efforts are very basic, but others coordinate changes across multiple documents and have a higher level of sophistication which can be harder to spot.”

The widespread accessibility of AI, along with vastly improved forgery quality, means insurers are battling a mix of opportunistic and organised fraud. On the one hand, cost-of-living struggles are driving everyday consumers to look for loopholes and reduce costs. 

“Fake documents are easier to create, the tools are readily accessible, so it’s more tempting to lie about policy information,” explains Kate Harrington, head of application fraud analytics at Admiral.

Equally, the role of organised crime groups cannot be underestimated. For these criminals, policy stage fraud is a gateway to wider, multi-step fraud operations. “Once bad actors are on book, they can plan how to use a product for the greatest financial gain, whether fraudulent claims are their end goal, or they want to move on to another product now that they’ve started to build credibility,” says Harrison.

Fake documents are easier to create, the tools are readily accessible, so it’s more tempting to lie about policy information.

Kate Harrington, Admiral

Failing on purpose and checking for weak spots

The rise in policy-stage document fraud shows that criminals are probing insurer defences right from the start of the customer journey to identify control gaps. “Fraudsters are actively testing the waters to see which insurers have weaker controls. If an insurer fails to detect a fake no-claims-bonus document at inception, this could suggest they might not spot manipulated vehicle damage photos later down the line,” says Admiral’s Harrington.

Offenders are quickly adapting their tactics depending on the controls they encounter, often combining simpler forms of deception with fabricated documents as part of a layered approach. 

Overall, policy manipulation is up by 89%, according to Synectics’ National SIRA data. This is a tactic that organised fraud groups often exploit, starting with lower-level misrepresentation that could plausibly be framed as error. If insurers question that information, fabricated documentation is then produced in support.

Fraudsters are also deliberately failing digital identity verification processes or purposefully manipulating quotes in order to trigger alerts and fall-back checks. 

“This offers bad actors an opportunity to provide very credible-looking fake documents in the hope that the fabrication goes undetected,” explains Harrison. “If the document passes verification checks, fraudsters know that insurers are likely to ignore or deprioritise a later alert against a previously checked policy.”

Responding to the threat

High proportions of ‘suspected’ rather than ‘confirmed’ document fraud within Synectics’ National SIRA data illustrates how difficult it has become to confidently detect and prove document fabrication.

Richards describes Zurich’s approach: “Our teams stay across the threat by keeping themselves up to date on what the tech can do. Using widely available programmes to create documents and manipulate images ourselves gives us clues on what to watch out for. For example, we recently identified a fraudulent domestic escape-of-water claim because an accompanying photo had an American-style power socket in the corner of the image.” 

If the document passes verification checks, fraudsters know insurers are likely to ignore or deprioritise a later alert...

Carina Harrison, Synectics

However, insurers need to focus on more than just their claims handling teams. “The frontline defence in call or contact centres also need regular training on document fraud indicators and red flags,” says Harrison. “For example, an extremely cooperative and helpful customer providing documents might be trying to mask fraudulent activity. 

“Fraudsters are also deliberately targeting contact centres in the belief they are less equipped than a counter-fraud team to spot the fabrication. 

“By acting in a way that triggers human intervention, or removes them from typical validation processes, bad actors are attempting to circumvent any document screening or forensics that may be in place.”

Because the human eye can only catch so much, insurers are investing in advanced fraud detection technologies to help verify documents and monitor images for AI. Yet even here, insurers are continually battling to keep pace. For example, metadata manipulation has evolved significantly. Wiping metadata has become far easier, with fraudsters able to inject convincing, fabricated information that makes a document look authentic.

Natalie Randall, deputy head of intelligence at DAC Beachcroft, explains how offenders are responding to improvements in technological defences: “We are now seeing fraudsters hard-copy printing fakes, and then producing a scanned or photographic image of the hard-copy print-out. This frustrates most technology’s capability when analysing metadata and visual indicators, as the fraudulent edits are now two steps removed from the disclosed document.”

She also cautions that metadata or visual blemishes are not automatic proof of fraud. “They can also have entirely legitimate explanations, such as image enhancement, scanning or document compression. Focusing solely on these ‘red herrings’ can drain investigative resources and delay the settlement of legitimate claims,” she adds.

This balancing act is one that insurers are very aware of as they juggle the need for speed and frictionless customer experiences with document fraud detection processes. “We don’t want to create too much of a barrier for our genuine customers by pushing too many into the call centre, for example – particularly as this is no longer the deterrent it once was,” says Harrington.

Focusing solely on ‘red herrings’ [such as metadata and visual blemishes] can drain investigative resources and delay the settlement of legitimate claims.

Natalie Randall, DAC Beachcroft

Data sharing and cross-industry intelligence

With organised fraud networks targeting multiple products, insurers and sectors, document fraud should not be viewed as an isolated event. Criminal networks are often seeking speedy settlements from high volumes of low value claims that may fly under the radar. Yet this is often just one element of a wider strategy, with the same fabricated documents being used as an entry point to exploit broader financial services sectors.

For that reason, insurers are placing growing emphasis on industry-wide intelligence that can identify cross-sector or cross-industry connections and quickly pick up emerging fraud patterns that are impossible to detect within a single organisation. 

While technical document analysis is vital, often the strongest indicator of fraud can be the wider activity associated with those documents. “These re-use histories and connections can sometimes be the only way to recognise organised fraud, or large multi-sector MOs,” says Harrison.

“The more data we share, the more likely we are to uncover fraudulent activity,” adds Admiral’s Harrington. “Our internal data can tell us if we have encountered an entity before, but an entirely new entity to us might already be a known threat to someone else.”

Where the authenticity of documents is uncertain, Harrison also highlights the practical value of direct collaboration between fraud teams. “Synectics’ National SIRA members, for instance, have access to fraud specialists across participating organisations who can quickly confirm if a document their firm has supposedly issued is genuine,” she says.

A shift in strategy

As document fraud grows in scale and plausibility, screening tools and capabilities are vital. But alone, they are not enough. Insurers need to shift their focus from determining if a single image or document has been manipulated, to understanding where that document sits within a much broader pattern of behaviour.

This has significant implications for fraud strategy. Insurers need to consider the timing and placement of document verification throughout the customer journey, with greater emphasis placed on shared intelligence that can identify coordinated activity across the policy lifecycle.

With insurers needing to move faster than ever to combat this evolving threat, cross-sector intelligence can offer a powerful advantage. More frequent customer touchpoints within banking and lending mean deeper insights that can help to quickly uncover links to suspected fraudsters, offering vital support in detecting this increasingly sophisticated fraudulent activity.

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