Fraud is no longer just a financial risk
Historically, insurers have primarily viewed fraud through the lens of financial loss. Fraud has been measured in claims leakage, organised criminal activity and the operational cost of investigation. Those challenges remain significant, but something more fundamental is changing. Fraud is no longer simply a cost to insurers. It has become one of the defining factors shaping customer confidence in financial services.
As artificial intelligence transforms both legitimate business processes and criminal activity, consumers are becoming increasingly concerned that they are being exposed to risks they neither understand nor feel equipped to manage. At the same time, businesses are seeing cybercrime and fraud become a routine operational threat rather than an occasional incident.
The question for insurers is not whether they can detect fraud. It is whether customers believe they are capable of protecting them from it.
AI has changed the fraud landscape
Recent European research, conducted by CRIF, highlights how quickly sentiment has shifted. Last year, just one in four consumers expressed concern about AI-generated fraud. This year more than seven in ten are worried that artificial intelligence is making it easier to generate new types of fraud and to scam people.
This reflects the speed with which AI-generated scams, synthetic identities, deepfake technology and increasingly convincing social engineering attacks have entered the mainstream. The European Parliament estimates that around eight million deepfakes were shared during 2025, up from 500,000 just two years earlier.
Nearly two-thirds of consumers now believe fraud is becoming a bigger personal threat, while 60% of business leaders see cybercrime as a major risk to their organisations. Almost half of businesses report experiencing more fraud attempts than they did a year ago, and the same proportion deal with attempted fraud on a regular basis. The responsibility placed on financial providers is clear, with four in ten consumers now saying insurers and banks are not doing enough to combat fraud.
From paying claims to protecting customers
This represents an opportunity for insurers to redefine their relationship with customers. Insurance has always been built on trust. Customers pay premiums because they believe someone will stand beside them when the unexpected happens. Increasingly, however, customers want reassurance before fraud occurs, not just support afterwards. Protection is becoming proactive rather than reactive.
Trust depends on staying ahead of criminals
Trust is shaped as much by confidence as by capability. Customers judge organisations not only on how effectively they stop fraud but on whether they appear prepared for the threats that are emerging. This creates an important challenge for insurers. Traditional fraud controls, many of which rely heavily on static rules, historical patterns and manual investigation, were designed for a different era. Criminals are now able to generate convincing fake documents, clone voices, manipulate images and launch highly personalised attacks using AI at a scale previously unimaginable.
Fraud is becoming faster, more adaptive and increasingly difficult to identify through conventional methods. At the same time, any preventative response from insurers cannot create greater friction in the customer journey. Genuine customers increasingly expect seamless digital experiences, particularly during claims, while insurers must continue to control costs and improve operational efficiency.
Smarter technology combined with human expertise
The answer lies in smarter use of technology. This requires investment in modern fraud detection, better use of trusted data, real-time analytics and AI-enabled intelligence, supported by robust governance and human expertise. It also requires collaboration across the wider financial ecosystem, recognising that fraud rarely respects organisational or sector boundaries.
Modern AI solutions can analyse vast volumes of transactional, behavioural and identity data in real time, identifying subtle anomalies that human investigators would struggle to detect quickly. Rather than relying solely on predefined rules, these systems continuously adapt as fraud patterns evolve, enabling earlier intervention while reducing false positives that inconvenience genuine customers. Progressive insurers are combining advanced analytics with experienced investigators who can interpret complex cases, exercise judgement and ensure customers are treated fairly.
Making fraud prevention part of the customer promise
Recognising that anxiety about fraud is sharply rising, insurers can differentiate themselves and build trust by helping customers understand how they invest in fraud prevention. This transparency can reinforce confidence without revealing operational detail and makes fraud capability part of the customer proposition. At a time when AI is changing the nature of fraud risk almost daily, that confidence may become one of an insurer's most valuable assets. Those insurers demonstrating that they are actively helping customers navigate an increasingly uncertain digital world will be the ones that earn greater customer trust, strengthen retention and ultimately deliver stronger commercial performance.
