AI Tools Fuel New Era of Insurance Fraud, According to Verisk

• By: Olivia Overman
• March 18, 2026

More than one-third (36%) of consumers would consider digitally altering a claim image or document even if it would break insurer rules, according to a Verisk State of Insurance Fraud study released today. That number increases to 55% among Generation Z and 49% among millennials.

At the same time, insurers report a sharp rise in manipulated media submissions, with nearly all (98%) agreeing that artificial intelligence (AI)‑powered editing tools are fueling an increase in digital insurance fraud. Three out of four (76%) insurers say manipulated media submissions have grown more sophisticated, even as confidence lags in detecting deepfakes at scale.

“AI editing tools are changing how people interact with digital content, and insurance is feeling that shift in real time,” said Shane Riedman, president of anti‑fraud analytics at Verisk. “Our concern is that many consumers don’t see small edits as crossing a line, but when those changes make their way into claims, they can materially affect outcomes.”

AI‑powered editing tools are no longer niche or technical, which means they are often widely used, easy to access and increasingly realistic. Forty-one percent of consumers know someone who has used AI editing tools to alter or create a photo, video or document for financial gain, the report says. This figure jumps to 64% for Gen Z and 54% for millennials, compared with just 31% of Gen X and 15% of baby boomers.

And while most consumers claim to possess strong ethics, real-world choices and attitudes—especially among younger generations—reveal a wide gray area. The line between clarifying and crossing the line is blurry, and many may not realize when they’ve gone too far, according to the report.

“As manipulated media becomes more common, many insurers face growing pressure to establish clearer boundaries, improve visibility, and prevent fraud—while preserving a fair and efficient claims experience for policyholders,” Riedman said.

Insurers are deploying a layered defense against digital media fraud, with 65% using automated third-party or vendor-provided AI-based detection tools; 58% using general consumer AI image-detection tools; 50% using internally developed AI-based detection tools; 44% relying on manual review; and 20% using other automated, non-AI detection tools.

While insurers are confident in their detection capabilities, doubts remain, with 55% only somewhat confident in their capabilities and 43% of insurers feeling very confident. Additionally, confidence in detecting digital media fraud varies by fraud type, with 58% of insurers confident they can detect edits to real photos or videos, compared to 32% for deepfakes.

Further, while insurers are mostly confident in their ability to detect fraud, several challenges persist, especially insufficient integration between fraud tools and existing claims systems (39%), in particular, managers are more likely to cite unclear ownership between teams as a challenge (39%). At the same time, vice presidents and executives often highlight tool performance issues, such as false positives (35%) and missed fraud (38%).

As the fraud landscape shifts, so must the industry’s strategies and willingness to work together, the report said.

Olivia Overman is IA content editor.