From AI driven scams to identity theft and organised crime, in 2025 the insurance continued to face a dynamic and increasingly complex fraud landscape. While traditional scams persist, new technologies and shifting criminal tactics reshaped the battlefield. Here's a deep dive into the most pressing insurance fraud risks this year, and what insurers and policyholders need to know to stay protected.
Identity theft, the fastest growing threat
According to the Insurance Fraud Bureau (IFB), identity theft has surged to record levels, becoming a primary enabler of policy fraud across the UK. Fraudsters are exploiting stolen personal data to:
- Open fake insurance policies
- File bogus claims
- Launder money through legitimate channels1
This trend is exacerbated by data breaches and the dark web’s thriving trade in personal information.
AI-Powered fraud, a double-edged sword
Artificial intelligence is revolutionising fraud detection, but it's also arming criminals with new tools. Deepfakes, synthetic identities, and AI generated documents are increasingly used to deceive insurers. As Experian notes, the accessibility of intelligent tech means fraudsters can now bypass even advanced security system.2
Organised crime and “Crash-for-Cash” rings
Organised fraud rings remain a major concern. These groups orchestrate complex scams such as:
- Staged car accidents
- Ghost broking (selling fake insurance)
- High-value asset fraud (e.g., classic car scams)1
These operations are often transnational, making detection and prosecution more difficult.
Online retail & telecoms, new frontiers for fraud
Cifas reports a notable rise in fraud targeting sectors adjacent to insurance, such as telecommunications and e-commerce. Fraudsters use these platforms to build synthetic identities or test stolen credentials before targeting insurers.3
Behavioural manipulation and social engineering
Scammers are increasingly using psychological tactics to manipulate victims into disclosing sensitive information or approving fraudulent claims. This includes phishing, vishing (voice phishing) and impersonation scams.
What can be done?
To combat these evolving threats, the industry is responding with:
- Collaborative intelligence sharing between insurers, IFB, Insurance Fraud Enforcement Department (IFED), Insurance Fraud Investigators Group, Law Enforcement, Regulators, Professional Membership Bodies and tech firms
- Advanced analytics and machine learning to detect anomalies
- Public awareness campaigns to educate consumers on red flags
- Stronger KYC/KYE (Know Your Customer (KSC and Know Your/ Expert (KSE) protocols and real-time identity verification. 2 & 4
Final thoughts
Insurance fraud in 2025 is no longer just about fake whiplash claims, it’s a high-tech, high-stakes game of cat and mouse. As fraudsters become more sophisticated, so too must our defences. For insurers, this means investing in smarter systems and cross-sector collaboration. For consumers, it means staying vigilant and informed.
The Economic Crime & Corporate Transparency Act 2023 (ECCTA) and its introduction of a new corporate criminal offence of ‘Failure to prevent fraud’ requires insurers to heighten existing anti-fraud controls and processes to combat the onslaught of increased fraud. Defeating fraud is no longer an option.
“Because in the fight against fraud, awareness is your first line of defence”