The Fraudster Next Door: Insurance Fraud Statistics

Do you remember the last time you had to make an insurance claim? Were you ever tempted to claim a little more than you were entitled to?

When you think insurance fraud, you think of someone burning down the garage to ease a cash-flow problem. But there’s much more to it than that.

Insurance fraud encompasses any act aimed at deceiving the insurance process, and it can be committed against an insurance company by a policyholder or a third party claimant.

Below are some of the newest available numbers regarding the rise and financial impact of this type of fraud.

Key Insurance Fraud Statistics for 2025 - Editor’s Choice

• The losses from insurance fraud now amount to $308 billion annually.
• At least 1 in 10 small business owners worry that their employees will fake work-related injuries.
• 78% of insurers in 2024 reported steady or increasing number of frauds.
• Synthetic identity fraud increased in 2024 mainly due to the emergence of generative AI.
• 10% to 20% of all insurance claims are fradulent.

Insurance fraud costs US consumers more than 308 billion annually.

(Statista)

The overall cost of insurance fraud continues to increase, and is now represeting a major burden on consumers in the United States.

Life insurance fraud is the most prevalent, costing some $75 billion each year.

(Conroy Simberg)

Medicare fraud is the second most common type, costing $68.7 billion annually, while worker's compensatino fraud amounts to $34 billion in yearly losses.

The average US consumer now pays $900 per year in increased premiums as a result of insurance fraud.

(FBI)

The majority of the costs here are derived from the inflating of insurance claims, staging accidents, misrepresenting facts or submitting claims for issues that never occured.

74% of insurers in 2024 reported steady or increasing number of frauds.

(Reinsurance Group of America)

What's more, some 68% of respondents in the survey stated that they anticipate that the level of fraud will increase over the next three to five years.

78% of insurers in 2024 stated that they had employees focused on fraud detection.

(Reinsurance Group of America)

The same survey found that 82% of insurers now provide fraud recognition training to their claims assessors.

In 2024, 70% of insurers planned to implement AI predictive models in the next two years.

(Earnix)

What's more, some 29% of insurance companies already had these models that make predictions based on real-time data.

51% of insurers in 2024 stated that they had to pay a fine or issue refunds to customers due to errors.

(Earnix)

As regulatory compliance becomes more complex, some 70% of respondents also claimed that the will spend more time on ensuring that they are compliant.

Americans lost a record  $16 million in healthcare insurance fraud in Q1 2024.

(Wire19)

This type of fraud is exploding in the US, as for comparison, the losses for the first three quarters of 2023 amounted to $9.9 million, before rapidly increasing in Q4 2023 with $10.2 million in quarterly losses.

The global insurance fraud detection market is worth $29.2 billion in 2025.

(Market.us)

The market is forecast to continue to grow at a  CAGR of 21.1% until 2033, reaching $144.3 billion in value that year.

In 2024, some 32% of insurers used algorithms and analytical tools to flag fradulent applications.

(MIB Group)

This represents a massive increase compared to just 10% of insurers in 2016.

In 2024, some 60% of insurance companies noted an increase in synthetic identity fraud.

(IDology)

As the use of generative AI increases, so does this type of insurance fraud, with 67% of insurers now being concerned it will continue to grow in the next few years.