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The retouched risk: How digital fraud threatens underwriting
- Anne Patzer
- 9 hours ago
- 3 min read
In a world where a flawless image is just a few clicks away, insurers face a new, subtle threat: the digital concealment of previous damage. With easy-to-use image editing software, fraudsters can attempt to deceive underwriters and gain unjustified advantages.
Digital “Clean-Up” of Pre-Existing Damages
You know how fraudsters operate: An applicant wants to take out home insurance for their house. However, there is previous damage on the roof that has not been repaired, for example, from an older hailstorm that damaged some tiles. Instead of honestly reporting this and accepting a correct premium or risk exclusion, they choose the digital route of fraud. They take photos of the roof and “repair” the visible dents and cracks in the roof tiles using common image editing software. The result, which he uploads to your online portal, shows a seemingly intact and completely undamaged roof.
Months later, the same fraudster can file the old damage as a new claim for that real, pre-existing damage, during the next storm. Since underwriting records show a spotless asset, the insurer is more likely to pay, unaware they’re covering damage that existed all along.
And AI-driven fraud in underwriting doesn’t stop at asset images. Criminals increasingly use generative AI to produce fake photos, forged documents, or even create synthetic identities, digital personas built from real and fake data. These tactics make it harder for underwriters to verify whether people or events in digital submissions truly exist, allowing fraud to slip through traditional checks until a claim exposes the deception.
The consequences of fraud in underwriting: More than just a financial loss
If such a case remains undetected, it damages your company on several levels:
Direct losses: You settle a claim that you would never have paid for if the information had been correct. These losses add up and weigh on your bottom line. This is part of the more than six billion euros in fraud losses in Germany each year.
Incorrect risk assessment: Your underwriting, the core of your calculation, is deliberately sabotaged. The premium does not reflect the true risk of the object, which jeopardizes the stability of your portfolio.
Inefficient processes: Every suspicious case that has to be checked manually ties up valuable resources in your fraud and specialist departments. This slows down processes for everyone, including your honest customers.
Burden on the collective: Ultimately, these costs lead to higher premiums, which must be borne by the entire insured community.
The solution: VAARHAFT as the first line of defense
To protect themselves proactively and efficiently, innovative insurers rely on solutions such as those offered by VAARHAFT. This AI-based fraud detection solution is specifically designed to address the challenge described here.
Using a simple API interface that can be seamlessly integrated into existing application processes, VAARHAFT analyzes submitted images and documents in seconds and detects fraud attempts before a contract is even concluded:
✅ Detection of manipulation: The AI not only detects classic retouching, as in the case of the repaired roof, but also whether images or documents have been generated or modified with AI tools.
✅ Duplicate and internet search: The software checks in real time whether identical or similar images already exist on the internet. For example, in old real estate ads or on craftsmen's blogs, that still show the previous damage.
✅ Metadata analysis: We look behind the visible façade and analyze the metadata, if available, for telltale signs that prove beyond doubt that the image has been edited.
With VAARHAFT, the attempted fraud is immediately classified as high risk. Your team can investigate the case in a targeted manner, while the majority of honest claims are processed smoothly and without delay.
Conclusion: Honesty and technology are the best policy
The case of the retouched previous damage clearly shows that insurance fraud is evolving. But so is the technology to combat it. Don't wait until the damage has been done. Proactively protect your application process and make it impossible for fraudsters to exploit your systems from the outset.
Invest in intelligent automation that not only protects your business from losses, but also speeds up processes for your honest customers.
With VAARHAFT, fraud doesn’t stay hidden behind perfect photos.
Contact us today to learn how easy it is to integrate VAARHAFT into your systems.
🛡️ Your partner for proactive fraud prevention.
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