How Australian Insurers Are Fighting Deepfake Fraud

Australia’s general insurance industry operates under one of the world’s most demanding prudential frameworks. It is also increasingly exposed to a fraud threat that its existing detection infrastructure wasn’t designed for: AI-generated and AI-manipulated evidence.

Much of the global deepfake fraud conversation centers on the US, but the threat is just as real for Australian insurers — and the local regulatory, legal and operational landscape creates both distinct challenges and distinct opportunities.

The Australian Insurance Fraud Landscape

Scale of the Problem

The Insurance Council of Australia (ICA) reports that insurers detected about A$560 million in fraudulent claims in 2023. That figure covers only detected fraud: the ICA’s fraud page notes that “an estimate of the value of undetected insurance fraud in the Australian market is not yet available.”

International comparisons suggest the undetected share matters. In the US, the Coalition Against Insurance Fraud says fraud occurs in about 10% of property-casualty insurance losses.

Insurance fraud is prosecuted under state and territory fraud offenses, and the ICA notes that penalties can include imprisonment for up to 10 years, a substantial fine, or both. The ICA distinguishes two persistent categories:

Opportunistic fraud — exaggeration of otherwise legitimate claims (the most common form)
Premeditated fraud — planned schemes by professional fraudsters, often involving organized criminal groups

AI-generated media amplifies both: it makes opportunistic fraud easier (editing a photo to exaggerate damage) and premeditated fraud more scalable (generating fabricated evidence for many claims).

The Industry’s Counter-Fraud Function

The ICA works with member insurers, law enforcement agencies and other stakeholders to detect, prevent and disrupt insurance fraud. Its counter-fraud function, ICINA, carries on the work formerly branded as the Insurance Fraud Bureau of Australia (IFBA), including:

Channels for reporting suspected fraud
Liaison with police where insurance fraud is involved
Supporting information exchange between insurers where fraud is reasonably suspected
Participation in government and community crime-prevention forums

This plays a role comparable to the NICB in the US — but in a smaller, more concentrated market where cooperation between major insurers can be more direct.

The Australian Regulatory Environment

APRA (Australian Prudential Regulation Authority)

APRA regulates general insurers, life insurers, private health insurers and superannuation entities. Key requirements relevant to fraud detection include:

CPS 220 — Risk Management. Requires a risk management framework that identifies, assesses, manages and monitors material risks. Deepfake-enabled fraud is an emerging operational risk that belongs within it.

CPS 234 — Information Security. Requires information security capability commensurate with the size and extent of threats to information assets. AI-generated evidence is part of that threat landscape.

CPS 230 — Operational Risk Management (in force since July 1, 2025). Broadens operational resilience requirements, lists claims processing as a critical operation for insurers, and tightens oversight of material service providers — including technology vendors used in claims.

AI supervision. APRA says its existing standards already apply to AI. Its April 2026 letter to industry called for a “step-change” in AI risk management and governance, and it has told entities to expect deeper engagement on AI and cyber risks. See our guide to APRA’s expectations for AI fraud detection.

ASIC (Australian Securities and Investments Commission)

ASIC’s focus on consumer protection and fair claims handling adds further obligations:

Claims handling is a financial service. Since January 1, 2021, handling and settling insurance claims has been a financial service, with licensing mandatory from January 1, 2022. Insurers must handle claims efficiently, honestly and fairly — which cuts both ways: undetected fraud raises costs for honest policyholders, while wrongly treating genuine evidence as fake harms claimants.

Utmost good faith. The Insurance Contracts Act 1984 (s13) requires insurers to act with the utmost good faith, and ASIC can take action where insurers breach that duty.

AI governance. ASIC’s 2024 report Beware the gap (REP 798) warned that licensees’ AI governance was lagging their AI adoption.

AML/CTF (Anti-Money Laundering / Counter-Terrorism Financing)

General insurance is largely outside the AML/CTF regime. Obligations under the AML/CTF Act fall on insurers that provide designated services — mainly certain life insurance and investment-linked products — and include:

Customer identification and verification
Suspicious matter reporting to AUSTRAC
Transaction monitoring

For those products, deepfake-powered identity fraud directly threatens AML/CTF compliance. Insurers subject to AUSTRAC regulation need KYC processes that can withstand AI-generated identity documents and biometric spoofing.

The Evidence Act

The Evidence Act 1995 (Cth) and the uniform evidence laws in most states and territories govern evidence in Australian courts. For AI-detected fraud that proceeds to prosecution or civil recovery:

Expert opinion is admissible under s79 where the expert has “specialised knowledge based on the person’s training, study or experience,” and the opinion is wholly or substantially based on that knowledge
The Federal Court’s Expert Evidence Practice Note (GPN-EXPT) and the Harmonised Expert Witness Code of Conduct require experts to disclose their reasoning, assumptions and methods
Evidence must be relevant (ss 55–58), which often means showing a file is what it purports to be; ss 146–147 provide presumptions for documents produced by processes and devices

In practice, forensic findings about deepfakes need to be explainable, methodology-documented and presented by qualified experts — the standards we discuss in our article on forensic reports that hold up to expert scrutiny.

Why Australia Is Well Positioned

Concentrated Market

Australia’s general insurance market is concentrated among a relatively small number of major insurers (IAG, Suncorp, QBE, Allianz and others). This enables:

Faster industry coordination — cooperation through the ICA is more practical than in a fragmented market
Collective intelligence — fraud patterns identified by one major insurer can be shared quickly with others
Standardized approaches — industry-wide detection practices are more feasible in a concentrated market

Digital-Forward Claims

Australian insurers have invested heavily in digital claims. Mobile claims, photo-based assessment and remote settlement are common across major insurers. This digital infrastructure is both a vulnerability (more attack surface for AI-generated evidence) and an advantage (detection can be added to existing digital workflows).

Strong Regulatory Framework

APRA’s principles-based regulation gives insurers flexibility to adopt new technology without waiting for prescriptive mandates. CPS 220 and CPS 230 expect insurers to address emerging risks — including AI-enabled fraud — within their existing governance structures.

Catastrophe Exposure

Australia’s exposure to bushfires, cyclones, floods and storms creates regular surges in claims. The 2022 floods in south-east Queensland and New South Wales (ICA catastrophe CAT 221) generated about 246,000 claims worth around A$6.37 billion as of March 2025. Surges like these stretch claims teams and increase reliance on remote, photo-based assessment — conditions in which fabricated evidence is harder to catch by eye.

Practical Steps for Australian Insurers

Immediate Actions

Assess your exposure. Audit your digital claims intake: what proportion of claims arrive with photos, videos or documents? What verification is performed on that media today? Where are the gaps?
Work with the industry. Share intelligence about suspected AI-enabled fraud through the ICA’s counter-fraud channels and with police. The more the industry shares, the faster collective defenses improve.
Update your risk framework. Identify deepfake fraud as an emerging risk in your CPS 220 and CPS 230 documentation, and map detection tools to the claims processing critical operation.

Medium-Term Investments

Deploy AI-powered media detection. Add deepfake and manipulation detection to your digital claims workflow, integrated through APIs into existing mobile and web channels.
Strengthen KYC where it applies. For life and investment-linked products subject to AUSTRAC requirements, use identity verification with presentation attack detection that is designed to resist deepfakes.
Build forensic capability. Ensure your investigation team (internal or outsourced) has access to digital forensic tools and understands how to interpret AI detection results in the context of Australian evidence law.

Strategic Positioning

Lead on industry standards. In a concentrated market, one major insurer adopting detection can influence industry norms.
Engage with APRA proactively. As APRA deepens its AI supervision, insurers with well-governed detection capabilities will be better placed in those conversations.
Test on Australian claims media. Evaluate detection tools on media that reflects Australian conditions — vehicle types, property styles, weather, document formats and lighting — rather than relying on results from other markets.

The Opportunity

Australia’s insurance market has the characteristics that make early adoption of deepfake detection particularly valuable: a concentrated market, digital-forward operations, strong regulation and significant catastrophe exposure.

Insurers that move now can build an advantage through lower fraud losses, stronger regulatory positioning and industry leadership. In a market where a handful of major players write most of the premium, early movers set the standard others follow.

deetech™ is an Australian company built in Adelaide, with an insurer-first platform built around claims workflows. Performance benchmarks for image, video and document analysis are available under NDA, and we recommend evaluating any detection tool on your own representative claims media.

deetech™ is Australian-built, and Enterprise plans can be deployed on-premises or air-gapped. Request a demo to discuss your claims workflow.

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