Insurance fraud statistics: Australia 2026

Insurance fraud is any deliberate attempt to obtain a payment from an insurer that the claimant is not entitled to, from exaggerating a genuine loss to staging an accident or fabricating a claim outright. The Insurance Council of Australia groups it into three types: opportunistic fraud, where a genuine claim is inflated; deliberate fraud involving misrepresentation; and organised fraud run by criminal networks. Exaggerating a genuine claim is the most common form. Under section 56 of the Insurance Contracts Act 1984, an insurer can refuse a fraudulent claim in full, even if part of the loss was genuine. Fraud can also target the payout itself, when someone impersonates a legitimate claimant and changes the bank details an approved claim is paid into.

Insurers detect fraud through claims assessment, data analytics and, increasingly, intelligence shared across the industry. In Australia, the Insurance Council's counter fraud division is building a national platform that lets insurers share fraud patterns and coordinate investigations, starting with motor claims. AI is now part of detection too: Verisk's 2026 study found 65% of US insurers use third-party AI detection tools and 50% use tools built in-house, yet 38% say those tools still miss too many altered images and documents. Because no detection layer catches everything, confirming that a claimant's bank details match their identity before the payout is released adds a final control at the point money leaves the business.

Detected and undetected insurance fraud together cost the Australian industry hundreds of millions of dollars a year. ICA members detected A$560 million in opportunistic motor and property insurance fraud in 2023, and the Insurance Council of Australia estimates undetected fraud costs a further A$400 million a year. Those figures exclude fraud against statutory schemes such as NSW CTP and workers compensation, where SIRA held 97 active fraud investigations in the June 2026 quarter. The cost flows through to policyholders as higher premiums, and the Insurance Council has commissioned an independent forensic review to measure the scale of undetected fraud more precisely.

Yes. AI editing tools make it easier to fabricate or inflate the evidence behind a claim. Verisk's 2026 study found 98% of US insurers agree AI-powered editing is fuelling digital insurance fraud, and 76% say AI-altered submissions became more sophisticated in the past year. RGA's global survey found falsified documents, such as medical records and death certificates, are the most common form of AI-related claims fraud. Eftsure's 2026 AU Payment Security Survey found 90% of Australians believe AI-generated fraud is harder to detect than earlier scams, so visual checks on claim documents, and on the bank details attached to them, are becoming less reliable.