The scale of artificial intelligence-enabled insurance fraud in the UK is becoming difficult to dismiss, and the industry professionals most exposed may not yet fully appreciate the threat.
Allianz stopped more than 32,400 fraud cases in 2025, preventing nearly £174 million in payouts, up from £157 million in 2024, as first reported by The Times. The insurer said criminals were using AI tools to doctor images of vehicles and properties lifted from social media, then submitting fabricated repair invoices to support false third-party claims.
In one case, a business owner’s van was copied from his company’s social media page, given an AI-generated crack on the bumper, and used to claim £1,000 in repairs that never happened.
Matt Crabtree, head of financial crime at Allianz, said undetected fraud would ultimately fall on honest policyholders.
“If these attempts keep increasing and some go undetected, it could affect premiums for genuine customers,” he said.
Yet the fraud threat does not stop at manipulated images. Fraudsters are now generating wholly fictitious policy documents to undercut legitimate brokers on price. This can leave consumers uninsured and honest intermediaries competing against fraudulently low premiums that carry none of the costs of underwriting or regulation.
The Insurance Fraud Bureau tracked a 52% rise in ghost broking cases between 2022 and 2024. FCA research from May 2026 found that 49% of young drivers had purchased insurance through social media or messaging platforms. Four in 10 said they would not feel confident identifying a fake policy.
The Association of British Insurers (ABI) recorded more than £1.16 billion in detected fraudulent claims across 98,400 cases in 2024. It estimated that fraud adds around £50 a year to the average policyholder’s premium.
Admiral reported separately in April that it detected nearly £87 million in fraudulent claims in 2024, up 71% from £51 million the prior year. AI was used to fabricate images of stolen watches, damaged luggage, and property.
The regulatory backdrop has also hardened. A corporate criminal offence under the Economic Crime and Corporate Transparency Act 2023 came into force on September 1, 2025. This held organisations liable for failing to prevent fraud by associated persons.
Experts have warned that while the direct scope targets only the largest companies, smaller firms throughout supply chains are not immune.
This data, however, tells a different story from how most brokers assess the threat. GlobalData’s 2025 UK Commercial Insurance Broker Survey found that only 5.2% of brokers view AI as the biggest threat to their business. This figure sits in sharp contrast to the fraud data and the growing openness of SME clients to AI-driven insurance services.
Crabtree urged policyholders and the brokers advising them to remove identifying details from any images posted publicly.
“If you are posting pictures of your cars, watches or technology online, remove any personal identifiable details like registration or serial numbers,” he said.
Nicola Smith of the Insurance Fraud Bureau said the pace of change had outstripped most people’s expectations.
“Criminals are more sophisticated than ever, and with the rise in use of AI, they exploit information in ways most of us wouldn’t expect,” she said.
