Global risk and claims specialist Sedgwick reported £41 million in fraud-related savings for clients in 2025, an 11% increase on the previous year, driven by a combination of AI-powered counter-fraud technology and human expertise.
The company’s 2025 fraud report flagged a sharp rise in insurance fraud enabled by artificial intelligence, including the use of generative AI tools to fabricate documentation, manufacture complaints, and create synthetic identities designed to support false claims.
Adam Parry, counter fraud operations director for Sedgwick in the UK, said the results demonstrated the firm’s commitment to shielding insurers from bad actors. “The introduction of our own AI-based counter fraud technology during the year led directly to increased levels of suspect claims being identified and resolved much earlier in the claim lifecycle,” he said.
Parry added that the firm’s broader counter-fraud strategy “provides a robust defence against a new breed of fraudsters who unwisely attempt to use AI for financial gain.” He also stressed that investment in staff remained central to the firm’s approach. “Investing in our people and their expertise, in an ever-changing insurance fraud landscape, remains critical in continuing to provide insurers with significant savings,” he said.
Among the most notable trends identified in the report was the evolution of identity fraud. Steve Crystal (pictured above), Sedgwick’s head of fraud and investigation services – International, described one case in which a fraudster obtained authentic insurance documents from an online exchange platform and used them to alter a genuine policyholder’s contact and bank details before filing a modest claim. The attempt was foiled when a claims handler identified an irregularity.
Crystal also warned of a growing threat posed by synthetic identities – profiles built by blending real data with fabricated information. “AI is unquestionably accelerating the growth in the creation of synthetic identities,” he said. He explained that fraudsters typically purchase policies using these fabricated profiles and allow time to pass to build a credible claims history before filing a false claim.
Crystal urged the industry to treat fraud prevention as a business necessity. “Insurance fraud is a daily crime with serious financial impact,” he said. “It’s a real crime with real consequences and having a strategy to tackle it must be part of the cost of doing business nowadays.”
The Sedgwick findings align with a broader industry alarm. Fraud across the UK reached unprecedented levels in 2025, with more than 444,000 cases recorded in the National Fraud Database – the highest annual total ever logged – marking a 6% increase on 2024, according to findings from fraud prevention service Cifas. Insurance sector incidents rose by 26%, exceeding 16,000 cases.
Cifas noted that more than 118,000 cases of identity fraud were recorded between January and June 2025 alone, a threat worsened by AI-enabled synthetic identities and fabricated profiles capable of bypassing security checks. Global losses from identity fraud exceeded US$50 billion in 2025, with early indicators suggesting 2026 will surpass that figure, according to AiPrise.
