Computer Vision for Automated Damage Detection in Insurance Claims
Overview
A leading auto insurance provider was facing mounting pressure from high volumes of vehicle damage claims. The traditional process relied heavily on manual image inspection, causing delays, increased operational costs, and inconsistencies in claim assessments. Additionally, fraud—ranging from reused photos to exaggerated damage—was difficult to detect in real time. To address these challenges, the company turned to computer vision to automate the analysis and approval of vehicle damage claims.
Business Challenge
Processing thousands of claims each month involved not just speed but accuracy, trust, and fraud prevention. Manual workflows meant that claims could take several days to process, frustrating customers and reducing adjuster productivity. There was also a persistent issue with fraudulent claims, such as altered or duplicate images, which led to financial losses. The company needed an intelligent, automated solution that could analyze vehicle images, detect the type and extent of damage, and flag suspicious or manipulated content—without requiring human review for every case.
Solution
The insurer implemented a computer vision system built on deep learning. Using over 100,000 labeled vehicle images, the team trained two separate models: a YOLOv5 object detection model to identify and localize damage, and a ResNet-50 classification model to determine the type and severity of the detected damage. The training dataset covered a wide range of car models, lighting conditions, angles, and damage types such as dents, scratches, cracked windshields, and bumper damage.
Image preprocessing steps helped standardize inputs, while data augmentation techniques like flipping, brightness changes, and zooming improved the model's ability to generalize across real-world conditions. An additional layer of protection was added through a forgery detection mechanism using image hashing and forensic analysis via CNNs to flag reused or edited images.
These models were integrated directly into the insurer’s claim submission workflow, allowing customers to upload images via the mobile app or website. The system instantly analyzed these images, presented the damage assessment to the claims agent, and even suggested repair cost estimates based on severity and regional rates. In cases where tampering was suspected, the system automatically routed the claim for manual review.
Results
The implementation led to dramatic improvements in operational efficiency and fraud detection. Average claim processing time dropped from several days to under an hour. The automated system detected over 92% of fraudulent images, a significant jump from the 40% detection rate when done manually. Operational costs per claim were cut by more than half, and claims adjusters became significantly more productive—handling over three times as many claims each day.
Customer satisfaction also saw a marked improvement. Real-time assessments and visual damage feedback helped boost transparency and trust, resulting in higher CSAT scores across channels. The solution proved to be scalable, efficient, and adaptable to real-world variability in user-submitted content.
Conclusion
By leveraging computer vision, the insurer transformed its vehicle claim process from a manual, paper-heavy workflow into a fast, AI-driven operation. The system improved accuracy, reduced fraud, lowered costs, and enhanced the customer experience. This case study demonstrates how automated image analysis can revolutionize workflows in insurance—and offers a blueprint for applying similar solutions across the BFSI sector and beyond.