The use of identity theft in insurance crime is expected to rise by 49 percent by the end of 2025, according to the National Insurance Crime Bureau (NICB).

The insurance fraud watchdog analyzed thousands of questionable insurance claims submitted by policyholders to their insurance companies from 2022 through June 30, 2025, and found a significant year-over-year increase in claims where an element of either traditional identity theft or the use of a synthetic identity was found.

Close to a quarter of the insurance claims processed that had identity theft as a reason for referral to NICB involved a synthetically generated identity.

Traditional identity theft involves using another person’s identity to commit a crime.

Synthetic identity theft is a newer form of identity crime that combines legitimate personally identifiable information, such as a social security number or date of birth, with fabricated information to create a new fake person or entity, making it difficult to identify and investigate.

“Identity theft and the use of synthetic identities are the foundation for life insurance, medical-related fraud, and cargo theft,” said NICB President and CEO David J. Glawe. “The ever-changing digital environment, coupled with artificial intelligence, has enabled criminals to create bogus identities and pose as a deceased person’s beneficiary to collect life insurance payouts, submit false medical expenses to receive reimbursement, or even reroute goods for sale on the black market. Some thieves are creating fictitious business entities that use identity crimes as the underpinning of criminal activity that targets the insurance industry.”

The NICB is currently piloting a machine-learning tool to flag questionable identities using anomalous identifier patterns and data aggregators to detect inconsistencies such as multiple dates of birth linked to a single social security number. Once flagged, investigators can intercept claims that may include a related identity theft.

Identity theft is frequently seen in:

Cargo Theft: Criminals assume the identity of a legitimate trucker or logistics company and hack into vehicle transporter and cargo websites to set up “fictitious pickups,” all to collect and resell high-value cargo.
Life Insurance: Account Takeover (ATO) is directly attributed to identity theft, where criminals target insurance and retirement accounts as financial institutions expand digital capabilities for policyholders and participants.
Medical Reimbursement: Scammers find and use personally identifiable information to obtain medical services and file fraudulent insurance claims for existing and “fabricated” policyholders.
Rental Properties: Fraudsters who commit identity theft purchase renters’ policies on property for which they have no contract and file fictitious claims.
Vehicle Financing: Stolen and generated information enables those behind these schemes to finance several vehicles within a short period of time with no intention of making payments.