The coronavirus pandemic, an unprecedented event in modern history, continues to leave its mark all around the world. Businesses of all shapes and sizes have had to make changes, especially when it comes to digital transformation—and the insurance industry is no exception.

Independent insurance agencies have been significantly impacted, and many have had to reinvent day-to-day operations. In 41% of Big “I" member agencies, the majority of the staff is still working remotely, according to a survey by the Big “I." This shift has forced a change in the customer experience model; what used to be optional digital advancements have become a requirement for businesses hoping to survive.

With more consumers than ever expecting to be able to purchase insurance online, file claims digitally and receive payments quickly, insurers are racing to accelerate the digital delivery of services. The pandemic has accelerated the digital movement that was underway, with many providers planning digital enhancements.

In fact, 44% of insurers plan to invest in mobile apps over the next year in order to support customers who want a digital option to open new policies, file claims, and submit documentation, according to a white paper by Kount.

While digital insurance services have reduced friction across the claims filing process, they're also opening new doors to fraud. Digital fraud is expected to increase in the insurance industry by 21% through 2026, with fraud costs expected to reach $12 billion, according to a study by BlueWeave Consulting.

Here are four insurance fraud trends to watch out for:

1) Bot quotes. Bots submit illegitimate bulk quotes to open fake policies using consumer information purchased or stolen from lead generators or agents' books. Carrier data requirements make them extremely costly to process.

2) Identity assumption. Fraudulent policies can be opened using a legitimate identity accessed through account takeover, hacking, or scraping personal details in order to submit false claims and receive payments.

3) Ghost brokers. Ghost brokers advertise deceptively low premiums in order to submit a policy request on behalf of a legitimate applicant. They make money by using misleading details and providing a fraudulent payment to the carrier, ultimately canceling the policy after pocketing the applicant's payment, leaving them uninsured.

4) Crash for cash. Fraudsters stage or deliberately cause a traffic collision solely for the purpose of financial gain.

Like any hazard, the key for insurance agents to avoid fraud is to limit exposure and put safeguards in place to protect against it. The best tool? Technology. Using fraud prevention software equipped with advanced AI and machine learning can proactively identify a fraudulent claim to reduce the major impact of claims fraud.

“Emerging tools and technologies that can be effective in the fight against these new schemes, as well as more traditional schemes, are data-based and help identify potential fraud during the underwriting and claims processes," writes Jay Sarzen, senior analyst, Aite Group in a new report, Fighting Evolving P&C Insurance Fraud. “The most effective of these solutions have an artificial intelligence (AI) component."

To respond effectively to increased levels of digital fraud, businesses need to deploy adaptive AI with access to a broad network of fraud detection signals. This capability allows agents to establish risk or trust in real-time throughout the insurance customer lifecycle in order to protect against the main insurance fraud tactics.

And with protections in place, agencies are free to explore digital innovations that can adapt to the market and drive revenue.

Vikram Dhawan is vice president of Kount, a digital fraud prevention solution company.