"As industries and organizations adopt digitization to assist customers, including with visuals like images and videos, it is imperative that they understand the unintended consequences of making those processes easier for consumers – it can also create significant opportunities for “fraudsters” to abuse those same products/programs. Bad actors will use continuously exploit emergent situations like disaster recovery, to leverage digitization tools to defraud all services including government and private sector."

- Amy Walraven, President, Chief Strategy Officer and Founder of Turnkey Risk Solutions

"The burden of proof falls to the mortgage lender to demonstrate the subject property is not damaged when disasters hit a subject property. Traditionally, this means we need appraisers to go back out and perform disaster inspections. Deploying image authentication technology has allowed us to skip this step in many situations. This helps our clients finalize their loans much quicker than they would have otherwise. We can now have a customer complete inspection minutes after requested vs waiting days/weeks for an appraiser to inspect the home. The GPS functionality, image validation, and date/time stamps give us peace of mind to know we are making the right decisions from a risk standpoint."

- Jay Parrott, VP of Operations, Royal United Mortgage

"Palomar assigns great value in the efficacy of empowering its customers to provide visual feedback in a trusted manner. Whether it be through the cataloging of property belongings in advance of a disaster or by capturing the critical early moments following a catastrophic event, visual trust provides a transparent channel for increased collaboration resulting in families and businesses getting back on their feet in a more efficient and favorable manner. As the industry continues to digitize, visual trust will become ubiquitous and essential for insurers and the insured."

- Jon Christianson, President, Palomar Holdings, Inc.

This month signals the start of “Hurricane Season.” Forecasters at The National Oceanic and Atmospheric Administration (NOAA) are predicting increased hurricane activity this year, marking seven consecutive years of above-average seasons. Sadly, many hurricanes quickly turn into disastrous episodes with real victims, damage, and an urgent need for response.  Insurers, government, and first responders have embraced digital tools to better respond to acute crises. The shift to digital tools is apparent as insurers have accelerated the process of digitization and nearly 85% of companies sped up the move to digital operations since the pandemic.  

However, along with digital processes, accompanying fraudsters are seeking to profit off of victims and support services. The National Insurance Crime Bureau has already warned that up to 10% of disaster claims paid in 2021 -- an estimated $9.2 billion -- were fraudulent. The NICB noted that fraud increased insurance costs across the U.S. Part of this fraud is digital and as insurers and governments use visual media, image deception and synthetics become a new threat vector. The threat is highlighted by the website “this X does not exist,” which showcases the ease with which image deception can be used for any purpose ranging from fake identities to home listings - or even insurance claims.  Earlier this year, Insurance giant Zurich warned that automated claims processing was a likely target of bad actors “using deep-faked evidence to support a bogus claim.” With the proliferation of image deception tools, which was recently well detailed by the Department of Homeland Security, we can expect greater threats of image and claims fraud associated with natural disasters.  

The digitization of disaster response goes beyond just insurance. Social media platforms are also critical in disaster response -- oftentimes the first and most informative sources of information pre/post-disaster. Social media has been effectively utilized to mass message preparedness information to large populations rapidly.  Further, it has also been one of the most significant outlets in relaying information out of disaster zones - usually, visual images and videos, which inform, influence, and rally content consumers toward action. However, the velocity and ease of sharing on social media lends itself to visual deception with regard to natural disasters. Users knowingly or unwittingly circulate falsified media. A Pew Research study found that 53% of adults who get their news on digital devices get it from social media - a thriving environment for visual deception at times of natural disaster. In 2016, during Louisiana’s summer floods, the American Red Cross was confronted with rumors and misinformation related to shelter policies and food distribution. False claims spread across social media platforms and threatened to erode public trust and overshadow the care the organization was providing. Aside from opportunistic or malicious disinformation, outdated information is also a common issue on social media after natural disasters occur. Old photos are often tagged and used for new events. For instance, a user tweeted a photo from a flood in Nashville, TN in 2010 and tagged it as a Houston, TX flooding in 2016. Sharing photos from past disasters often occurs because users are eager to be the first to report disaster evidence.

Trust Technology Will Be Necessary for Digitization

Given these challenges and many more, new and innovative trust tools are being developed to help businesses and victims protect themselves from visual fraud as disaster response digitizes. Authenticated media through image provenance is one of those promising approaches that will help insurers, governments, service providers, and the general public sidestep the dangers of visual deception. Image provenance has been highlighted by several outlets, including this governmental report, as an emerging way to authenticate visual content for insurers and others  - like in a claim, underwriting, or request for government support. Palomar Specialty Insurance actively deploys this technology to empower their insured to easily document and protect their possessions before a storm hits and facilitates efficient processing of claims after the event has ended. Though most insurance companies advise that insureds document and label possessions annually, the inability to fully authenticate the date, time, location, and veracity of the documentation is challenging. Provenance helps insurers and the insured by establishing an immutable trust bridge via authenticated visual media. 

Other technologies like predictive behavioral analytics fraud software, ForMotiv, use “Digital Polygraph” to measure user behavior and correlate it to fraudulent outcomes. By analyzing millions of behavioral patterns such as keystrokes, typing speed, hesitancy, form corrections, etc, ForMotiv is able to baseline good behavior and spot risky deviations.

With changing global surface temperatures the possibility of more intense and destructive hurricanes and storms increases. As the risk of damage goes up, first responders will need to look to new technology tools to relay trust and accelerate response.