NICB Reports Surge in Synthetic Identity Fraud Impacting U.S. Insurance Crime

The National Insurance Crime Bureau (NICB) forecasts a 49% increase in identity theft-related insurance crime by the end of 2025, driven by a surge in synthetic identity fraud. This form of fraud combines real and fabricated personal data to create fictitious identities, complicating detection and investigation efforts.

Synthetic identity fraud accounted for nearly 25% of identity theft referrals to the NICB, contributing to over $47 billion in losses in 2024 alone. Such fraudulent activities impact various insurance lines, including life, medical, cargo, rental property, and vehicle financing. NICB highlights that the digital landscape and advancements in technologies like artificial intelligence enable criminals to exploit synthetic identities to commit fraud, such as claiming life insurance benefits under false beneficiary identities or submitting fabricated medical reimbursement claims. To combat this rising threat, NICB is piloting a machine-learning tool that detects anomalies in claimant information, such as multiple birthdates linked to a single Social Security number, allowing investigators to intercept fraudulent claims proactively.

Common schemes include cargo theft using stolen logistic identities, account takeovers targeting insurance accounts, fraudulent medical claims, unauthorized renter's policies, and vehicle financing fraud. NICB leverages data from insurance companies, law enforcement, and federal agencies to continuously develop threat assessments and enhance fraud detection capabilities. Insurance professionals are advised to stay vigilant and report suspected identity theft cases to their carriers and NICB. NICB remains a key entity in the prevention of insurance crime by combining intelligence, analytics, and policy advocacy to protect the industry from evolving fraudulent schemes.