Insurers sound the alarm over rise in AI-driven scams

THE insurance sector is struggling to combat the growing influx of AI-driven fake claims, as sophisticated fraud is challenging the sector's outdated traditional system, putting increased pressure on insurers to adapt.

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According to a recent report by fintech firm Adyen, one in seven claims (15%) were proven to be fraudulent, resulting in a financial impact on insurers.

Fraudulent claims are eroding insurer revenues, with the average cost of a fake claim reaching £84,000.

The report noted that 90% of businesses estimate that fraud accounts for an average reported loss of 2.6% of annual revenue, peaking at 5%.