Deepfakes and Insurance Fraud: The Next Big Challenge for Australia’s Cyber Defences

Introduction: The New Face of Cybercrime

Fraud has always been a challenge in Australia, but a new threat is emerging—deepfakes. Driven by artificial intelligence, deepfakes produce hyper-realistic video and audio forgeries that can convincingly mimic real people. For Australians, this represents a new frontier in cybercrime that could impact both businesses and individuals, changing the way scams are carried out and detected.

Before diving further into this blog, if you haven’t arranged cyber risk insurance, now’s the time. Explore comprehensive cyber risk insurance cover today.

From Photoshop to Deepfakes: How Digital Deception Evolved

Fraud isn’t new; scammers have long relied on forged paperwork, staged accidents, or doctored images. But deepfake technology has raised the stakes. With AI, criminals can fabricate accident “evidence”, imitate your identity, or even generate fake audio that sounds like you approving a transaction. These scams are far more convincing, harder to detect, and can threaten both your insurance claims and personal data security.

What Makes Deepfakes So Convincing?

Deepfakes look and sound alarmingly real. With AI, fraudsters can replicate voices, facial expressions, and subtle behaviours. For you, that means scammers only need some stolen personal information and basic software to create a fake “you” filing claims, making calls, or even submitting video evidence.

Aussie victim loses $400,000 after trusting deepfake ads

A resident of Hunter Valley fell prey to a deepfake scam that featured manipulated footage of celebrities like Elon Musk and Prime Minister Anthony Albanese. The victim was lured via a realistic ad and ultimately lost $400,000 before authorities issued a public warning.

Source: news.com.au

Why Traditional Cybersecurity Measures Are Falling Short

Most fraud detection tools were built to catch forged paperwork or mismatched data. They weren’t designed to detect manipulated voices or videos. That means when you submit claims digitally, older verification methods like video calls or voice ID can be tricked. This makes cyber insurance and strong personal security measures more important than ever.

Red Flags: Spotting Deepfakes Before It’s Too Late

Even though they look convincing, deepfakes often reveal small flaws. You can protect yourself by noticing:

• Unnatural blinking or eye movements in videos
• Shadows or lighting that don’t line up
• Distorted or robotic audio tones
• Conversations that sound scripted or odd

Trust your instincts—if something feels off, it probably is.

The Human Factor: Psychological Manipulation in Deepfakes

Deepfakes aren’t just about technology; they exploit human trust. Seeing a realistic video or hearing a distressed voice can trick you into lowering your guard. That’s why slowing down, double-checking communications, and questioning unusual requests is critical.

Business Risks for Everyday Australians

If you’re running a business, the risks are wide-ranging:

• Financial – fraudulent claims can increase your premiums or cause losses
• Reputational – a scam linked to your name can damage customer trust
• Operational – disputes over false claims waste time and resources
• Regulatory – businesses could face penalties if scams aren’t handled properly

Cyber insurance helps cover the financial and legal fallout from these risks.

AI vs AI: Fighting Fire with Fire

The good news? AI can also be used to detect deepfakes. Insurers are beginning to adopt systems that scan for digital manipulation in claims. As a customer, choosing an insurer with strong cyber protections and ensuring you have cyber insurance adds another layer of defence.

Government and Legal Responses in Australia

While Australia is strengthening cybercrime laws, deepfake-specific regulations are still catching up. Until more robust frameworks are in place, individuals and businesses need to take proactive steps, including securing cyber insurance to protect against scams and fraud.

How Policyholders Can Protect Themselves

You can lower your risk by:

• Keeping personal and business data safe
• Staying informed about emerging scams
• Verifying insurer communications through official channels
• Reviewing your cyber insurance cover for protection against fraud losses

Building a Digitally Aware Mindset

Technology alone isn’t enough. As a policyholder, it’s essential to build digital awareness into your habits. Training your staff (if you run a business) or simply staying informed helps you recognise and respond to threats before they escalate.

The Road Ahead: Staying Ahead of the Curve

Deepfake scams are just getting started. As they become more advanced, staying ahead means investing in the right protections, including cyber insurance, staff training, and digital security practices.

At Global Insurance Solutions, we arrange tailored cyber risk insurance designed to protect Australian businesses against emerging threats like deepfake fraud, data breaches, and social engineering attacks. Our expertise in cyber risk management has earned us multiple industry accolades — including Top Insurance Broker 2024, Rising Star Broker 2022, and the Small Brokerage of the Year Excellence Award 2025 — recognising our commitment to delivering innovative, client-focused solutions in a rapidly evolving digital landscape.

Conclusion: Staying One Step Ahead in the Age of Synthetic Media

Deepfakes mark a major shift in the way fraud can impact Australians. While insurers are working on advanced detection, it’s up to you to ensure you’re protected. Cyber insurance provides a safety net against these modern risks, giving you confidence that if scams target you or your business, you won’t be left carrying the financial burden alone.

We’ve also explored other cyber risks and how insurance helps safeguard your business against a wide range of digital threats.

Read: Comprehensive insurance guide for tech startups | Cyber Attack Response Strategy

Frequently Asked Questions

What is deepfake insurance fraud, and how can insurers protect themselves?

Deepfake insurance fraud occurs when scammers use AI-generated video, audio or images to fabricate evidence and submit false insurance claims. For example, a fraudster might produce a video showing a staged car accident that never happened, or imitate a policyholder’s voice to approve a false payout.
To protect themselves, insurers are now adopting AI-powered detection systems that scan claims for digital manipulation, training claims teams to recognise deepfake indicators, and tightening claim verification protocols such as multi-factor authentication and in-person assessments.

Are current insurance policies covering deepfake losses in Australia?

Most traditional insurance policies in Australia do not specifically mention deepfake-related losses, creating a legal grey area. While some cyber insurance policies may cover losses from social engineering, phishing or impersonation, they may not explicitly include synthetic media fraud. Policyholders should review their cyber insurance wording and seek endorsements or clarifications from their broker to ensure deepfake-related scams are covered.

How can deepfake technology be used to fake insurance claims?

Deepfakes can be used to create convincing false evidence to support fraudulent claims, such as:

• Fabricated accident footage showing property damage
• AI-cloned voices authorising fraudulent policy changes or payouts
• Synthetic medical video testimony to support injury claims
• Faked security footage to show theft or fire incidents

Because these forgeries can appear authentic, they can slip past traditional claim checks unless advanced detection is in place.

How can AI tools detect deepfakes in insurance claims?

AI detection tools analyse subtle digital markers that humans can’t see, including:

• Inconsistencies in lighting, shadows, or pixel patterns
• Lip-sync mismatches and irregular facial movements
• Audio waveform irregularities
• Metadata anomalies in video or image files

Insurers are piloting these tools to scan claims evidence automatically before human assessors review it, reducing the risk of paying out on fraudulent claims.

What cyber defences are needed against deepfake fraud for businesses in Australia?

Businesses need a layered defence strategy combining:

• Staff training on social engineering and deepfake awareness
• Strong identity verification for financial approvals and claim submissions
• AI-based media authentication tools
• Multi-factor authentication and secure communication platforms
• Cyber insurance to cover financial losses and legal costs

Building cyber resilience ensures businesses can recover quickly even if a deepfake-based scam breaches their defences.

Are SMEs insured against deepfake scams in Australia?

Many small and medium enterprises (SMEs) in Australia mistakenly believe their existing business insurance covers all cyber risks. In reality, most standard policies exclude cyber-related fraud unless a dedicated cyber insurance policy is in place. SMEs should work with an insurance broker to review their current coverage, close any gaps, and ensure they are protected against emerging risks like deepfake scams, which can be financially devastating to a small business.