Fraud remains a significant and evolving challenge within the life and health insurance sectors. In Australia and New Zealand, insurers across both markets are operating in a complex risk landscape driven by economic pressures, shifts toward digital servicing, regulatory pressures, and increasingly sophisticated fraud methodologies. Recent market level fraud surveys conducted by Gen Re across these countries found a mix of solid foundational strengths alongside meaningful opportunities to build more resilient, forward leaning fraud mitigation strategies.

This article synthesises those survey findings to present a clear view of the fraud mitigation landscape, the tools and in house resources available to insurers, and the areas where existing processes demonstrate strong risk management capability.

Life insurers in Australia and New Zealand operate in an environment built on trust. At the point of claim, particularly for death, disability or serious illness, insurers rely on documentation supplied by customers, third parties, and beneficiaries. While most claims are genuine, the risk of fraud is evolving rapidly and the consequences for life insurers can be significant, financially and reputationally.

Although fraud in life insurance is not new, the scale, sophistication and accessibility of tools available to fraudsters have materially changed in recent years. Insurers across the region need to ask: Are the current risk controls keeping pace with the modern fraud landscape?

One Challenge – Overseas Documents

Technological advancement has changed the nature of fraud risk. Sophisticated generative AI tools and digital identity ecosystems are now widely accessible and can be used to produce highly convincing documentation, including medical reports, incident statements, identification records and official looking certificates. The use of deepfake imagery and voice cloning has surged, enabling impersonation of policyholders, third parties, and beneficiaries.

One of the most challenging areas for life insurers is overseas claims, particularly death claims occurring outside Australia or New Zealand. In these circumstances, insurers may rely on documentation such as death certificates, medical records, police reports or coronial findings produced in foreign jurisdictions.

While many countries maintain robust civil registration systems, documentation standards and verification processes vary significantly across jurisdictions. The ability to independently verify the authenticity of overseas documents can be limited, particularly when language barriers, unfamiliar legal frameworks or local administrative practices are involved.

This creates an environment where fraudulent documentation may be submitted to support claims, sometimes with limited practical avenues for insurers to validate the information provided.

Sophisticated tools are increasingly capable of replicating formatting, signatures, institutional letterheads and even entire document ecosystems. For insurers that rely on documentation as a key evidentiary component of the claims process, this represents a meaningful shift in risk exposure.

Opportunities to Strengthen Fraud Mitigation

Despite the solid foundations, our survey results reveal several areas where both markets can significantly enhance their fraud prevention frameworks.

• A notable opportunity lies in the development of internal specialist Special Investigations Unit (SIU) teams. In Australia, 60% of insurers do not have an in house SIU or equivalent, and this proportion is even higher in New Zealand at 71%. As fraud schemes become more sophisticated, particularly in areas such as identity theft, account takeovers and synthetic identities, dedicated internal expertise can substantially strengthen investigative capability and reduce exposure.
• Training is another critical opportunity. While fraud awareness training exists in both markets, it remains inconsistent. In Australia, 20% of insurers only provide fraud training at onboarding, with no ongoing formal program, and in New Zealand the majority focus training primarily on claims assessors rather than broader staff groups. Ensuring all customer facing and operational staff receive regular, structured fraud training can create an early detection culture that identifies risk signals sooner and more reliably.
• Underwriting processes also present room for improvement. Both markets rely heavily on simplified or straight through underwriting models, yet very few insurers perform post issue reviews, random sampling or additional verification checks after issuance. Additionally, most insurers in both countries do not ask applicants whether premiums are being funded by third parties, an important measure for detecting imposter schemes or policies lacking genuine insurable interest, with 80% of Australian and 86% of New Zealand insurers not asking this question. Strengthening these early stage controls would help prevent fraudulent policies from entering the portfolio.
• Another major opportunity lies in the adoption of automated tools and technologies. In Australia, only 40% of insurers use any form of automated suspicious claim detection system, while in New Zealand the adoption rate drops to just 14%. Moreover, most insurers in both markets lack internal fraud indicator databases or central watchlists and do not routinely utilise third party digital verification platforms. Implementing automation, analytics, and external data verification tools can significantly reduce blind spots while improving operational efficiency.
• Collaboration across the industry and with regulatory bodies remains limited. Neither market has an established regulator approved industry information sharing framework, and most insurers in both countries do not regularly report fraud cases to authorities. In Australia, only half of all insurers report confirmed fraud cases, and in New Zealand just 29% do so. Strengthening industry wide collaboration would meaningfully enhance collective fraud intelligence and create a stronger deterrence effect.
• Funding and resourcing can present a challenge. Fraud detection capability often competes with other operational priorities, and the return on investment can be difficult to quantify until a significant fraud event occurs.

Data Breaches are a Fraud Risk

Recent high-profile cyber and data breach incidents across the broader insurance sector,¹ particularly within private health insurance, have demonstrated the scale and sophistication of modern attacks. While those incidents were not directly related to claims fraud, they highlight how insurers can become attractive targets when valuable financial and personal data are involved. In other known examples, data breaches and PII (personally identifiable information) thefts have made insurers and their customers susceptible to claims fraud, account takeovers, and other harmful acts.

Life insurers must therefore consider fraud risk not only within the claims process, but across the entire information and operational ecosystem.

The structural evolution of the insurance industry in Australia and New Zealand may also influence fraud resilience. Over the past decade, many life insurers have separated from banking groups and now operate as standalone entities. While this shift has created strategic focus within life insurance businesses, it may also mean that insurers no longer benefit from the scale, infrastructure and fraud detection capabilities historically embedded within large banking institutions.

This raises an important strategic consideration: Do life insurers have access to sufficient shared intelligence, technology and investigative capability to address increasingly sophisticated fraud threats?

Fraud risk will continue to evolve alongside technology and global connectivity. For life insurers, the challenge is not only detecting suspicious activity when it occurs, but ensuring governance, operational capability and investment remain aligned with a changing threat environment.

Tools and Resources – Insurers Strengthen Defences

The findings from our two surveys highlight a range of tools and in house capabilities that insurers can adopt or expand to strengthen their fraud mitigation frameworks.

• Various customer authentication technologies remain an area of high value and can boost “know your customer” protocols. Although 85% of New Zealand insurers already use controls to detect synthetic identities or account takeovers, the remaining proportion, along with many Australian insurers who lack these controls, could benefit from implementing them. This is especially relevant given that identity theft and account takeovers were identified as the most common fraud types by New Zealand participants.
• Third party digital verification tools also represent a major untapped opportunity. No Australian insurer surveyed reported using such tools for claim verification, and 57% of insurers in New Zealand reported the same. These tools can assist with document authentication, identity validation, global death registry checks, financial background reviews and other critical verifications that currently rely heavily on manual processes.
• Analytics driven risk scoring represents another area of future development. Both markets reported substantial dependence on manual review within underwriting and claims processes. Integrating rules based engines, anomaly detection models, or machine learning based risk scoring systems can help insurers flag high risk cases earlier and with greater accuracy.
• Consolidating data internally through watchlists or suspicious-indicator repositories would materially enhance organisational memory and help insurers detect repeat behaviours, entities or patterns that may otherwise go unnoticed. Only 60% of Australian insurers and just 29% of New Zealand insurers maintain such internal databases, presenting another clear opportunity for improvement.

For the industry across Australia and New Zealand, the question may not simply be whether fraud risk exists, but whether insurers are collectively prepared for how it may develop in the years ahead.

As underwriting departments continue to increase straight-through processing (STP) rates, insurers are achieving faster policy issuance and a more seamless experience for advisers and customers. However, the reduced level of human assessment introduces potential fraud risk.

Automated underwriting decisions rely heavily on data integrity and predefined rules, which can be vulnerable if incorrect, incomplete or deliberately manipulated information is provided at application.

Similarly, growing pressure on claims departments to automate assessments through rules engines and digital lodgement pathways can reduce the level of direct engagement with claimants and treating practitioners.

While automation can significantly enhance efficiency and customer experience, it may also limit opportunities to detect inconsistencies, behavioural indicators or documentation anomalies that experienced claims professionals often identify through deeper review and interaction. From a fraud risk perspective, an increasingly automated value chain, spanning underwriting through to claims, may create vulnerabilities if controls, verification processes and escalation pathways are not carefully designed and regularly tested.

The Path Forward

Our surveys revealed the Australia and New Zealand markets are well positioned for the next stage in fraud mitigation maturity. They have strong foundational practices, committed teams and well structured claims and policy frameworks. Yet both markets also face rising and increasingly complex fraud threats that require meaningful investment in technology, data, specialised expertise and industry collaboration.

Insurers in both countries can transition from a reactive model to a more proactive, intelligence driven approach by enhancing internal capabilities, formalising training programmes, modernising underwriting and claims detection with automation and analytics, and improving information sharing practices across the industry. Such improvements will not only reduce fraud losses but also strengthen customer trust and contribute to a more resilient and sustainable insurance ecosystem.

Feel free to reach out for more details on the surveys and how Gen Re can help you.

Endnote

1. Recent cyber attacks:
   D. Croft, “Hackers target Aussie pensioners in major super fund cyber attack,” cyberdaily.au, 4 April 2025, https://www.cyberdaily.au/security/11940-hackers-target-aussie-pensioners-in-major-super-fund-cyber-attack.
   
   N. Schmidt, “Health care giant Medibank sued over data breach that affected 9.7m people,” news.com.au, 5 May 2023, https://www.news.com.au/technology/health-care-giant-medibank-sued-over-data-breach-that-affected-97m-people/news-story/10e22382e25108e1283051c135e32db5.
   
   J. Skatssoon, “iCare launches systems review after 193,000 claimants affected by privacy breach,” Government News, 6 June 2022, https://www.governmentnews.com.au/icare-launches-systems-review-after-193000-claimants-affected-by-privacy-breach.
   
   Webber Insurance Services, “The 2021 Data Breach Notifications in Australia,” https://www.webberinsurance.com.au/data-breaches-list#twentyone.

Last accessed: 5 May 2026