Opportunistic claims fraud: A growing challenge and how insurers are tackling it

19 March 2025 / 3 min read

Opportunistic claims fraud is on the rise, driven by financial pressure, technology and a lingering belief that insurance fraud is ‘victimless’. By combining data and human insight, insurers can identify fraud while educating customers about the real cost of false claims.

Opportunistic claims fraud has long posed a thorny challenge for insurers – one that has only become more pronounced in recent years. Unlike organised fraud, opportunistic claims arise when everyday people see a chance to fabricate or exaggerate a claim, aiming to secure a bit more than they’re due.

These aren’t the archetypal bad actors thought of in fraud. As Kaye Sydenham, Product Manager for Anti-Fraud, Claims UK at Verisk, notes: “They’re typically not people who would rob a shop, but the chance presents itself, and they take it.”

This mindset is surprisingly pervasive, with motives ranging from personal financial struggles to the availability of technology that enables more believable false claims. While economic uncertainty has contributed to the rise of opportunistic claims fraud, there is a lingering belief that insurance fraud is a victimless crime – a sentiment the industry must address.

Economic pressures and the ‘victimless crime’ mindset

The cost of living crisis has exacerbated opportunistic claims fraud. Exaggerated claims were the most common form of insurance fraud in 2023, with 25,700 claims amounting to £407 million.

Claims may rise around times of financial pressure, such as the festive period. They often involve a desire to upgrade a personal item that has supposedly broken or been lost. Other common examples include exaggerated injury claims or the inclusion of old vehicle damage after an road traffic incident.

“People see an opportunity to make a little extra cash, particularly when they’re under financial strain,” says Neil Jones, Head of Claims Investigation Unit at Verisk. “The mindset is often: ‘I’ve been paying premiums for years; surely this one claim doesn’t hurt.’”

This rationalisation can lead to losses that have significant financial repercussions on the industry and policyholders. Opportunistic fraud doesn’t just harm insurers; it also inflates costs for honest customers in the form of increased premiums. According to Jones, raising awareness is critical to shifting the belief that these claims are harmless: “It’s not a victimless crime. It costs everyone.”

Technology as an enabler – and a solution

Technological advances, too, have driven the rise of opportunistic claims fraud. Sydenham says: “Technology has made it easier than ever to alter photos and documents to support fraudulent claims.” This ease of fabrication has lowered the psychological barrier to fraud, making it feel less severe than an intentional car crash or organised scam.

However, these same technologies also equip insurers with detection tools. Advanced software can detect manipulated documents, suspicious patterns in data and other red flags, allowing insurers to allocate investigative resources more efficiently and take action.

The effectiveness of technology depends on fine-tuning. Insurers typically consider the ideal solutions partner to be one that strikes the right balance, successfully identifying most cases of fraud while reducing the noise of false results. As always, human judgment is irreplaceable. A trained investigator’s gut feeling can go a long way in determining what to do with the red flags technology presents.

Prevention through awareness

Education is a powerful tool for preventing opportunistic claims fraud. This approach means building awareness around what constitutes fraud and the potential consequences, including legal repercussions, higher premiums and an Insurance Fraud Register record.

“Many people go into this naively, for instance not realising that exaggerating a claim is fraud,” says Jones. By making claims fraud socially unacceptable, particularly given its impact on other policyholders’ premiums, insurers can help foster a more honest claims environment.

At the same time, addressing low trust in the insurance industry is critical to reduce the mindset behind opportunistic claims fraud. By clearly outlining what is covered (and what isn’t) in a transparent, jargon-free way, insurers can strengthen trust with their customers and encourage them to file honest claims without fear of unnecessary scrutiny.

Ultimately, insurers face a balancing act: they must swiftly flag potential fraud without hindering genuine claims, all while building trust and a positive claims experience. By combining technology, human insight and a dedication to service, insurers can mitigate opportunistic fraud for the benefit of themselves and policyholders.

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