It is estimated that European insurance fraud costs insurance companies around £13 billion each year. However, most insurance companies only know how many scams they've caught, and it's not the full extent of the loss.
Manchester-based Veridox was founded by Dan Sandler and his longtime colleague, Joey Clover. Former lawyer and cereal entrepreneur Sandler previously launched and sold Tabb, a popular ordering and payment app for bars and restaurants. He was recently recognized as a rising star in the high-tech nation of northern England.
Sandler said tfn“Before Veridox, I ran another business. It's a vehicle damage app with a large user base, but there's no clear revenue model. At the time, I spoke to the underwriter for AI manipulation. I realized that I had to develop a product that could be used in December 2024.
Veridox has developed a new AI-driven platform that identifies documents and images that are manipulated with forensic accuracy. The company recently secured £1 million in seed funding to prepare technology for a wider market release.
This funding round was led by an outward VC with a contribution from Solo Investments Holdings Limited, an investment company founded by Media Entrepreneur Solly Solomou. With new capital, Veridox plans to accelerate product development and expand its sales efforts.
Currently, Veridox is working closely with 15 major UK insurance companies as a development partner, and plans to grow a team of 13 to support general launches later this year. The company is proud of its diverse workforce, with 30% of its team coming from Bame Backgrounds.
Product: “Red Flag” or more
Many fraud detection tools today warn insurance companies of suspicious documents, but don't explain exactly what has changed or why it is important. Veridox's platform takes a different approach by providing a clear and contextual explanation of the types of operations detected. For example, you can distinguish between harmless changes such as adding a signature and intentional fraud such as the amount of a doctor's bill.
Dan explained the technology in detail. “Veridox's cutting-edge AI model enables an industry-first approach to analyzing every aspect of a claim's document. It instantly detects instances of potential operations. It provides contextual analysis with inference.”
He said, “Our mission is to help insurers make more informed decisions about fraud faster. This explainability highlights us by providing reasons why documents present risks of fraud, and our development partners are already seeing the benefits.”
The platform traditionally performs detailed forensic analysis of claims, when it takes hours for a physical investigator to complete. In a pilot with a $3 billion insurance company, Veridox's MVP revealed £50,000 of fraud within seconds. The AI-generated report complies with UK Rules 35 of Civil Procedure and will be used as evidence in court.
Emerging markets with strong demand
There are other companies that offer fraud detection solutions, but most rely on pattern recognition or anomaly detection. Companies such as Experian and LexisNexis risk solutions, as well as AI-centric players such as Quantexa and FICO, provide a robust analytics platform to identify suspicious activity primarily based on data patterns. Although powerful, these approaches can generate a large number of false positives, which slow down investigators and burden claims teams.
Veridox's forensic and explanatory AI fills the gap by providing clear, contextual insights explaining what the operation occurred and why. This allows insurers to focus their investigations more efficiently than high-risk cases and take strong legal action when fraud is detected.
Sanchit Dhote, principal of the Outward VC, said: “In the face of monumental challenges like insurance fraud in the AI era, Veridox could not only restructure the market, but also set new standards for fraud detection.
