Agentic AI in Insurance Faces Fraud Risks Without Stronger Identity Verification

Agentic AI in Insurance: Why Identity Authentication Is Critical to Prevent Fraud

Insurers are increasingly adopting agentic AI to streamline claims processing and customer service. But this shift introduces fresh security challenges, especially around verifying identities. Without strong authentication, the risk of fraud rises significantly, threatening both insurers and policyholders.

Ofer Friedman, chief business development officer at AU10TIX, an identity verification provider, highlights that current identity verification methods remain vulnerable. While combining a government-issued ID with a live selfie once sufficed, technologies like deepfakes have made this approach less reliable.

New Risks with AI-Driven Fraud

AI tools are becoming more accessible to fraudsters. They use AI to create realistic fake IDs and facial images, making it harder to detect fraudulent claims. Friedman points out that AI favors fraudsters because it requires vast data sets, including real and fake images, to improve. This data often involves sensitive personal information, raising privacy concerns.

For instance, websites now generate deepfake passports with any face desired, making traditional checks insufficient. This evolution demands stronger, device-based verification factors to confirm that the device and user are authentic and untampered.

Partnering AI with Identity Verification

To address these issues, AU10TIX has partnered with Microsoft to integrate identity verification with Microsoft Copilot AI agents. This approach automates the verification of identities and documents during insurance claims. While Copilot wasn’t initially built for insurance, its AI capabilities suit the identity verification needs essential to claim processing.

According to Friedman, “Without identity, you cannot cash in or cash out. You cannot do anything with a policy.” Ensuring the authenticity of policyholders is fundamental to preventing fraud and maintaining trust in agentic AI systems.

What Insurers Need to Do

• Implement multi-factor authentication that includes device-based checks to detect jailbroken or stolen devices.
• Use AI-powered detection tools trained to differentiate between deepfakes and legitimate photos.
• Continuously update verification protocols to keep pace with evolving fraud techniques.
• Partner with trusted identity verification providers to integrate AI verification seamlessly into claim workflows.

Insurers that overlook these steps risk exposing themselves to sophisticated fraud schemes that AI technologies enable. Strengthening identity authentication is no longer optional—it’s a necessity for safe and effective AI-driven insurance operations.

For insurance professionals looking to deepen their knowledge of AI applications and security measures in the industry, exploring targeted courses can provide valuable skills and insights. Consider checking out AI courses tailored for insurance jobs to stay ahead in this evolving landscape.