Insurers call for tighter AI safeguards as synthetic fraud grows

During a panel on climate and cyber risks at one outlet BFSI Insight Summit 2026, senior executives from Acko General Insurance, HDFC Ergo and GIC Re stressed that AI is reshaping fraud tactics, with large language models producing synthetic documents that evade conventional checks. They argued that point-in-time questionnaires are insufficient and that insurers must combine advanced data analytics with human oversight to stay ahead.

The speakers pointed out that cyber insurance demand is expanding to traditional industries, but underwriting safeguards must ensure firms maintain basic security practices. They also observed a shift in how customers discover policies, with 5-10% of leads now coming from AI-driven search and 45% of respondents using LLMs for initial research. Finally, the discussion highlighted persistent insurance gaps for SMEs in smaller Indian towns and called for better climate-risk mitigation and coordinated reinsurance strategies.