Car insurance prices may continue to rise after industry experts warned of people using AI technology to trick insurers when making claims.
Insurance giant Allianz suggested that people are using technological advancements to claim for incidents which may have never happened in the first place.
Fraudsters would have previously staged a "crash-for-cash" scam, but now technology can be used to include fake number plates, damage and even supporting documents.
In some cases discovered by the organisation, actual vehicles may have already been written off.
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People have been using AI technology to manipulate images of car crashes to make false claims
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Allianz said it had seen a 300 per cent increase in incidents where apps had been used to distort reality between 2021-22 and 2022-23.
Matt Crabtree, head of financial crime intelligence and investigation strategy at Allianz, said: “There is some fantastic technology out there, which is making our lives so much better in many ways.
“However, the sad reality is that fraudsters are using this same technology for their own illegal purposes and to target innocent members of the public to make a profit, with total disregard for the impact to the victim.
“Although insurance fraud is evolving all the time, so are our robust controls and systems, which are designed to spot emerging trends.
"Our highly trained investigators then root out those who are trying to exploit the system, in order to protect honest customers and keep costs down.”
Scott Clayton, head of claims fraud at Zurich UK, warned that instances of such crimes are on the rise, especially as technology improves further.
He said this required insurers to keep up with the technology being used to crack down on people trying to make fraudulent vehicle claims.
Aviva uncovered almost 10,000 instances of fraud two years ago, saving £120million from being paid out in fake claims.
According to Confused.com, the average price of car insurance has soared to £941, despite a price drop of £54 in the last three months.
While many will be pleased that car insurance prices are falling, there are fears that costs could rise again in response to insurers paying out fraudulent claims to scammers.
Mark Allen, head of fraud and financial crime at the Association of British Insurers (ABI), said that all companies should be putting legitimate customers at the forefront.
The expert said: "Insurers are alive to the various tactics fraudsters deploy and use sophisticated software to detect false or edited images.
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Experts are concerned that drivers are taking advantage of AI technology
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“The use of technology is a key part of the insurance sector’s counter fraud weaponry and there will be no let-up in the industry’s prevention and detection of fraudulent claims, and enforcement against insurance fraudsters.”
