By Amy Dee, 12 September 2024
In the era of digital transformation, emerging technologies are shaping the insurance landscape, bringing both opportunities and challenges. While the industry has been battling issues like fraud for decades, a new threat has surfaced in the form of "shallow fakes." Unlike deepfakes, which use advanced AI and machine learning techniques to create highly realistic synthetic media, shallow fakes rely on simpler methods like basic editing, selective cropping, or misrepresenting context to distort reality. Despite their simplicity, shallow fakes are posing a significant challenge for the insurance industry.
What Are Shallow Fakes?
Shallow fakes involve the manipulation of content through relatively easy-to-access tools and minimal technical expertise. Examples include altering documents, tampering with audio or video recordings to omit or change important details, or even using still images taken out of context to paint a misleading picture. The ease with which these manipulations can be performed, combined with the increasing sophistication of editing tools, has made shallow fakes more prevalent in various sectors—including insurance.
How Shallow Fakes Affect the Insurance Industry
1. Fraudulent Claims
Insurance fraud is a persistent issue, costing billions annually across sectors like auto, health, and home insurance. Shallow fakes exacerbate this problem by enabling fraudsters to create convincing yet misleading media to support false claims. For example:
Auto Insurance: A claimant may submit a cropped or edited photo that exaggerates the extent of vehicle damage after a minor accident.
Health Insurance: Manipulated medical records or falsified doctor’s notes could be used to secure unauthorised payouts.
Home Insurance: Fake images or altered videos can be used to inflate damage from natural disasters, fires, or thefts.
2. Disputed Liability
In legal disputes, shallow fakes can complicate the process of determining liability. Imagine a situation where surveillance footage from a business is tampered with to show a slip-and-fall accident happening differently than it actually did. Adjusters and investigators who rely on digital evidence to assess claims could be led astray by such altered content, potentially resulting in wrongful payouts or the denial of legitimate claims.
3. Undermining Trust
One of the cornerstones of the insurance industry is trust—customers trust insurers to act in good faith when paying out claims, and insurers rely on customers to provide accurate information. The rise of shallow fakes puts that trust at risk. If insurers feel they cannot rely on the authenticity of documents, photos, or videos, they may become more skeptical of all claims, slowing down the processing time and increasing administrative burdens. Meanwhile, customers may lose faith in the system if they feel their legitimate claims are being unfairly scrutinised.
4. Increased Investigation Costs
The growing prevalence of shallow fakes will likely lead to increased investigation costs. Insurers may need to invest more heavily in technology and expertise to detect manipulated media, slowing down the claims process and increasing operational costs. Insurance companies will need to stay ahead of the curve by adopting tools that can verify the authenticity of digital content—whether through AI-driven detection software or manual verification by experts trained in digital forensics.
How the Industry Can Adapt
Advanced Detection Tools
Insurers need to invest in advanced tools that can help detect shallow fakes. While AI-driven systems are often associated with combating deepfakes, similar technologies can be adapted to detect lower-level manipulations, such as Damage Control. By flagging suspicious content, insurers can prioritise investigations and reduce the risk of fraud.
Collaboration with Tech Experts
Partnerships with technology companies specialising in digital forensics can help insurers stay ahead of new trends in media manipulation. By working closely with tech experts, insurance firms can gain access to cutting-edge tools and training to ensure their staff can effectively recognise shallow fakes.
Education and Awareness
Employees, from claims adjusters to investigators, need to be aware of the growing threat posed by shallow fakes. Regular training sessions that cover the latest manipulation techniques, as well as how to spot red flags, will help staff stay vigilant. Additionally, educating policyholders on the importance of submitting unaltered, verifiable evidence will foster a more transparent relationship between insurers and clients.
Regulatory Support
As shallow fakes become a more prominent issue, governments and regulatory bodies may need to step in to establish guidelines on how to handle manipulated content in insurance disputes. Clear policies on the use and acceptance of digital evidence will help provide a framework for insurers to navigate this complex issue.
Conclusion
Shallow fakes may not possess the sophistication of deepfakes, but their simplicity and ease of creation make them a significant challenge for the insurance industry. From enabling fraudulent claims to undermining trust and driving up costs, these altered forms of media have far-reaching consequences. However, by investing in detection technologies, fostering industry partnerships, and educating both employees and customers, insurers can effectively mitigate the risks posed by shallow fakes and maintain the integrity of the claims process.
The rise of shallow fakes reminds us that even small technological shifts can have outsized impacts on industries like insurance. Staying ahead of these trends will be crucial for protecting the bottom line while maintaining customer trust.
To learn more about how Damage Control can help your business protect against fraud, get in touch today or book a demo now.
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