AI Tools in Job Applications: Opportunities, Risks, and the Rise of the Perfect Candidate

AI & Employment: What Insurance Professionals Need to Know

More than half of job applicants—53%—have used AI-powered tools to create their CVs in the past year. These AI CV builders streamline CV creation by generating, optimising, and customising content, as well as matching candidates with jobs. This growing trend poses unique challenges for recruiters, hiring managers, and insurance professionals working with recruitment firms.

AI's role extends beyond CV writing. About 29% of candidates use AI to assist with remote interviews, and 45% rely on it for completing online tasks and assessments. While AI can polish language and presentation, improper use risks producing generic or misleading content that doesn't truly reflect a candidate’s skills or experience.

Concerns Around AI Use in Recruitment

Integrity in job applications is at stake. Hiscox research shows that 37% of candidates wouldn’t correct AI-generated embellishments on their CVs, such as exaggerated skills or experience. This creates a minefield for recruiters who must distinguish between honest applicants and those using AI to deceive.

From an insurance perspective, this raises exposure to claims if recruiters pass on inaccurate candidate information. Professional indemnity insurance becomes critical to protect recruitment agencies from potential fallout.

Divided Opinions on AI Use by Candidates

• 41% of candidates believe AI use is unfair to others.
• 42% think it misleads employers and recruiters.
• 59% consider AI use “fair game.”
• 46% feel applicants not using AI tools are at a disadvantage.

This split highlights the importance of clear policies around AI use during recruitment.

Managing AI Use in Recruitment: Practical Steps

• Spot AI misuse: Watch for numerous similar applications, overly polished language, or responses that lack specific examples. Follow up with calls to verify authenticity.
• Educate clients: Help employers understand AI’s role, risks, and prevalence. Encourage fairness and transparency over outright bans.
• Review processes: Identify recruitment stages vulnerable to AI misuse, such as remote interviews or verbal reasoning tests, and work with clients to humanise these areas.
• Set clear AI policies: Guide candidates on acceptable AI use. For example, allow AI support for CV structuring and interview prep but discourage its use during live interviews or assessments.
• Ensure insurance coverage: If a candidate’s dishonesty leads to claims against your client or advisory role, professional indemnity insurance is vital for protection and peace of mind.

Dishonesty in Job Applications

Dishonesty remains a major issue. According to the study:

• 38% of applicants admit to lying on their CVs.
• 53% exaggerate experience.
• 41% add fake hobbies.
• 33% overstate skill proficiency.
• 14% provide false references.

This underlines the risks recruitment firms face and reinforces the need for specialist insurance solutions.

The Perfect Candidate Campaign

Hiscox’s campaign highlights these challenges through an AI-generated CV that looks perfect on the surface but reveals lies and exaggerations on closer inspection. Created with creative studio Uncommon, this campaign underscores the importance of specialist insurance for recruitment sectors facing new risks like AI deception.

To learn more about the risks AI poses to recruitment companies and how insurance can help, visit Hiscox’s campaign page.

For those in insurance seeking to understand AI's impact across industries, exploring targeted AI training can be valuable. Check out Complete AI Training’s latest courses to stay informed on AI tools and their implications.