FleetCheck warns of rising AI insurance fraud risk

The threat of AI-enabled insurance fraud is growing rapidly for vehicle fleets, driven by dramatic improvements in the realism of AI-generated images and video, according to fleet software provider FleetCheck.

Neil Avent, Chief Technical Officer at FleetCheck, said recent breakthroughs in generative adversarial networks (GANs)—a type of AI that uses competing neural networks to produce highly realistic images—have led to a “step change” in the quality and believability of manipulated visuals.

“If you take an image of a vehicle involved in an accident and ask AI to ‘add scratches and light dents,’ today’s output is far more convincing than even a year ago,” Avent explained.

FleetCheck warns that the most likely use of this technology in fraud is exaggerating vehicle damage following a legitimate accident. In a potential scenario, a third party could use AI to worsen the appearance of damage in photos submitted as part of a claim—resulting in inflated insurance costs for fleets.

“If an employee is involved in a collision, the driver of the other vehicle may take pictures of the damage incurred and ask AI to basically make it worse to increase the value of the claim. One of the advantages of GANs technology is that it can do this across multiple images with a high degree of consistency,” Avent added.

Although current AI outputs may not yet be foolproof, FleetCheck believes the “tipping point” is months away, as technology continues to improve at pace.

“We’re reaching a stage where it is not easy even for experts to see that some images have been manipulated and fleets should be aware of the growing potential for fraud and its resulting impact on their insurance costs.”

To counter the risk, FleetCheck is urging fleet operators to adopt better documentation practices, including instructing drivers to take comprehensive photos of all vehicles involved in any incident.

“However, there is a simple solution – asking your drivers who are involved in collisions to take pictures of all the vehicles involved, meaning that a complete record of the accident is created and later use of AI can be much more easily identified. This is something that can be done using our app, which provides prompts that walk the driver through the process,” Avent noted.

Nick Hutson, Compliance and Training Manager at 1st Choice Insurance—FleetCheck’s insurance partner—said that while fraud is nothing new, AI is changing the game.

“Fraudulent and exaggerated claims have been a persistent issue for decades, but the methods used to carry them out have evolved significantly over time, becoming increasingly difficult to track and manage,” he said.

He recommends fleets implement extra procedures like clear photo documentation and digital reporting tools to safeguard against false claims, which could have a significant impact on long-term insurance costs.