NICB Projects 49% Surge in Identity Crime Fraud Impacting U.S. Insurance in 2025

When Fraud Evolves: 49% Surge in Identity Crime Targeting U.S. Insurance

If there's one trend keeping insurance leaders up at night, it’s the rapid rise in identity-related fraud. The National Insurance Crime Bureau (NICB) projects a significant 49% increase in insurance fraud tied to identity crimes by the end of 2025. At the heart of this sharp uptick? Synthetic identity fraud—the creation of entirely new identities by blending real and fabricated data. This subtle form of deception has become the fastest-growing financial crime.

Synthetic Identities: The Fraud That You Can’t See Coming

Unlike traditional identity theft—where stolen information is used to impersonate an individual—synthetic identity fraud assembles bits of real data with invented details to fabricate a new, undetectable persona. What makes this crime so insidious is how difficult it is to trace or resolve, allowing criminals ample time to execute fraudulent schemes. Nearly a quarter of identity crime referrals processed by NICB in the first half of 2025 involved synthetic identities.

It’s a game changer in the world of insurance crime.

Why It Matters for Insurers: Operational Strain and Rising Costs

The cost scale is staggering: according to AARP, identity-related crimes in 2024 resulted in over $47 billion in losses. Such losses inevitably translate into increased premiums and added friction in claims processing and investigation workloads.

David J. Glawe, NICB’s CEO, stressed:

“Identity theft and the use of synthetic identities are the foundation for life insurance, medical-related fraud and cargo theft… criminals create bogus identities and pose as a deceased person’s beneficiary… submit false medical expenses… reroute goods for sale on the black market.”PR NewswireCarrier Management

Ian Laughlin, NICB’s data sciences director, put it bluntly:

“This complexity gives criminals much more time to run the schemes, collect money and get away with it. Ultimately, the cost of this fraud is directly passed along to the consumer.”National Insurance Crime Bureau

Detecting Deception: Progressive Tools & Consumer Protections

NICB isn’t standing still. They’re piloting a machine-learning tool designed to flag anomalies—like multiple birthdates linked to a single Social Security number—that may indicate synthetic identities. This proactive approach gives investigators an early lead to intercept fraudulent claims before payouts occur.

On the consumer side, public protection remains vital. NICB urges policymakers, insurers, and consumers to guard against identity theft through:

• Locking credit reports with major bureaus,

• Using unique passwords and a password manager,

• Leveraging two-factor authentication,

• Safeguarding sensitive documents,

• Avoiding unsecured platforms,

• Deleting stored PII when no longer needed.

These aren’t just helpful tips—they’re essential defenses in a world where one data breach may spell disaster.

Quick Read: Identity Crime by the Numbers

This isn’t an emerging risk—it’s an immediate challenge that affects both insurer solvency and consumer trust. By blending advanced analytics, early detection, and consumer vigilance, the insurance industry can push back against this surging threat.