Fraud appears to be worsening in the UK’s insurance sector, driven in large part by the submission of phony claims backed by AI-altered images. 

Cardiff-based insurer Admiral recorded a 71 percent rise in fraud during 2025 compared with the previous year and is attributing the shift to the growing use of AI software to alter or fabricate claim evidence, according to a news story published Thursday by the BBC. 

Examples detected by Admiral’s fraud team included an image of a gold-and-diamond watch that the insurer said was clearly AI-generated, a car photo in which damage had been exaggerated, and a claim in which a vehicle number plate had been changed and repositioned to duplicate a submission. The BBC said all of those claims were identified and rejected.

“This is a trend across the entire insurance industry,” Haith, from Admiral’s household claims team, told the BBC. The report said insurers were seeing AI used not only to manipulate images of damage but also to create documents that did not exist.

The Insurance Fraud Bureau told the news agency that the industry was “heavily concerned” about the rise in AI-generated claims and was investing in technology to counter the threat. John Davies of the bureau said opportunistic customers were using AI to exaggerate genuine claims, while organized crime gangs were using it to create fake documents and make fraud more efficient, according to the report.

In response, the insurance industry is trying to match the threat with its own detection tools. Admiral told the broadcaster it uses anti-fraud software capable of identifying AI-generated or manipulated material and said detection was improving across the market.

Read more at the BBC