Insurance industry urged to share fraud data as AI makes scams easier to execute
Carpe Data, a data and analytics firm, is calling for insurers to collaborate on combating artificial intelligence-driven fraud, which now allows bad actors to commit crimes at unprecedented scale and speed.
The problem has fundamentally changed. Fraudsters have always submitted fake documents and altered receipts. AI removes barriers to entry - the tools require minimal technical knowledge and enable criminals to operate at volumes previously impossible.
"My main worry is that things are moving so fast. How do we keep up in such a highly regulated industry?" said Tom Rasmussen, vice president of product at Carpe Data. "It's about open communication on both sides to make sure that we're understanding the problem and finding solutions for it."
New fraud tactics emerging
Bad actors are using AI to exaggerate damage claims, generate false receipts and invoices, and create counterfeit carrier websites. The website spoofing represents a particularly sophisticated approach.
Fraudsters use coding agents and AI to build fake sites that mirror legitimate carrier pages, then trick customers into buying policies and submitting premium payments. Street brokers have always sold unauthorized policies, but AI enables this at scale with minimal effort.
"AI allowed people with no coding skills or very limited Photoshop skills to suddenly have the tools at their fingertips," Rasmussen said. They combine fake websites with AI-generated search engine optimization and traffic redirection to reach victims online.
Regulation slows response, criminals don't
Insurance carriers operate within multiple layers of management, procurement, and safety systems. Each layer adds time to decision-making. Fraudsters operate with no such constraints.
"The bad guys don't know the rules. They have no safeguards slowing them down. They are just full steam ahead, and so they can be much more nimble," Rasmussen said.
A single bad actor typically targets multiple carriers. This pattern, combined with the speed and scale of AI fraud, makes information sharing essential. Carriers that communicate about suspicious individuals and emerging fraud patterns can implement defenses faster.
The U.S. rarely prosecutes insurance fraud relative to its actual prevalence. Offenders simply move to a different carrier, state, or region and continue. Data sharing across the industry would make repeat fraud harder to execute.
Carpe Data deploying tools
Carpe Data has integrated software with Verisk's ClaimSearch platform to flag potential fraud and send alerts. The company plans to release additional tools designed for easy integration without requiring IT resources from carriers.
The firm is developing AI-powered products specifically designed to identify repeat offenders and prevent them from defrauding multiple insurers.
For insurance professionals responsible for fraud detection and claims management, understanding these tactics and supporting industry collaboration becomes critical to protecting your organization. Learn more about AI applications in insurance and how AI data analysis identifies fraud patterns.
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