Synthetic Data

Synthetic data is artificially generated information designed to reflect the statistical patterns, relationships, and business behaviors found in real data without reproducing actual policyholder, claimant, employee, or partner records.

Updated: July 2026 • 18 min read

A Practical Guide for Property & Casualty Insurance

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Synthetic data is artificially generated information designed to reflect the statistical patterns, relationships, and business behaviors found in real data without reproducing actual policyholder, claimant, employee, or partner records.

How insurers can use artificially generated information to accelerate AI development, strengthen testing, improve collaboration, and support responsible innovation.

Infographic titled Synthetic Data at a Glance flowing from raw source and business rules through generation, validation and fidelity, approved use, monitoring, and retirement.
Infographic titled Executive Value Chain showing constraints, faster development, safer collaboration, broader testing, validation, monitoring, and outcomes.
Infographic titled Types of Synthetic Data in Insurance comparing fully synthetic, partially synthetic, hybrid, simulation-based, and model-generated data.
Diagram titled How Synthetic Data Is Created from raw data and rules through scenario assumptions, generation, multi-stage validation, and documented decision.
Infographic titled Privacy and Security Defense in Depth with seven stacked control layers from data minimization through incident response.
Infographic titled Executive Synthetic Data Validation Scorecard scoring statistical fidelity, business realism, privacy, and model/workflow utility into an integrated decision.
Diagram titled Synthetic Data Across the Claims Lifecycle from FNOL through triage, investigation, decision and settlement, and payment, with humans retaining authority.
Infographic titled Intelligent Underwriting AI Workbench from submission intake through referral and portfolio views, with underwriter decision authority.
Diagram titled Synthetic Fraud Intelligence Network with an AI analytics engine linking claimants, attorneys, and providers to produce investigation leads, not determinations.
Diagram titled Synthetic Documents for AI Evaluation from generation through OCR/IDP, retrieval and RAG, summarization, and professional review.
Diagram titled Responsible Synthetic Data Governance Loop from approved purpose through generation, validation, professional review, approved use, and monitoring.
Diagram titled Enterprise Synthetic Data Architecture connecting legacy systems, a data fabric, generation and validation, and consumption environments.
Diagram titled Synthetic Data in the Claims AI Lifecycle from scenario design through FNOL/triage, document intelligence, severity, litigation, review, and monitoring.
Diagram titled Synthetic Data in the Underwriting AI Workflow from scenario design through underwriter bind or decline and portfolio monitoring.
Diagram titled Synthetic Data for Fraud Detection & SIU from rulebase and relationship generation through network analytics, SIU workbench, and investigation with SIU judgment.
Infographic titled Executive Synthetic Data Decision Framework contrasting green-light versus caution, with readiness, governance, and pilot gates leading to scale, redesign, or stop.
Infographic titled Enterprise Synthetic Data Implementation Roadmap spanning 12–18 months across six phases and swimlanes for business, governance, data, technology, and change.
Infographic titled Executive Synthetic Data Performance Dashboard with columns for strategy, efficiency, quality, governance, and financial value.
Infographic titled The Future of Trusted Insurance AI with six stages over 12–18 months-plus from strategic convergence to business outcomes.
Infographic titled Synthetic Data Ecosystem Glossary as a hub-and-spoke map of governance, quality, privacy, RAG, claims, underwriting, fraud, and generative AI terms.
Infographic titled Executive One-Page Synthetic Data Summary combining ecosystem, ROI, governance, KPI trends, and top ten takeaways.
Infographic titled Enterprise AI Governance Crosswalk with executive oversight around the synthetic lifecycle and AI, data, privacy, security, audit, and risk functions.
Infographic titled Enterprise AI Learning Journey from executive strategy through use cases, technical foundations, and adoption.
Infographic titled The Future of Trusted Enterprise AI with pillars for strategy, trusted/synthetic data, responsible AI, and human expertise converging to outcomes.
Infographic titled Executive FAQ Quick Reference with five principles, top ten questions, and domain FAQs for business, governance, technology, AI, claims, underwriting, and fraud.

Artificially generated information designed to reflect selected characteristics of real data without representing actual records.

To support development, testing, training, collaboration, and rare-scenario coverage while reducing unnecessary exposure of sensitive data.

No. It complements production data and still requires representative real-world validation.

No. It may leak information, reproduce bias, omit important patterns, or create unrealistic records.

Yes. Generated outputs may reveal memorized source content or proprietary business patterns.

Sometimes for narrow tasks, but most material insurance use cases should be evaluated against protected real-world evidence and often benefit from hybrid data.

It may improve coverage or robustness when well designed, but it can also degrade performance. Improvement must be measured.

Yes. It can support prompt testing, safety evaluation, structured-output checks, and document scenarios.

Yes, especially text and mixed-content scenarios, but outputs require constraints, privacy review, and business validation.

For FNOL, document intelligence, severity, litigation, reserves, fraud, subrogation, testing, and training.

Yes. Controlled simulations can support repeatable practice without exposing real claimants.

It supports submission processing, appetite tests, risk summaries, portfolio scenarios, and training.

It can generate artificial examples for testing, but they are not professional engineering opinions.

It broadens scenarios and network tests; alerts remain investigative leads.

Yes. Artificial relationships can test graph analytics and SIU workflows.

A named business owner should share accountability with data, technology, privacy, security, legal, and AI-governance functions.

Approved purpose, source authority, validation, documentation, access, monitoring, change control, and retirement.

Through statistical, business, privacy, fairness, security, and real-world utility evaluation.

When products, costs, behaviors, source data, models, or intended uses materially change—not by calendar alone.

Controlled source access, generation tools, validation services, versioned storage, registry, secure environments, and monitoring.

Build, buy, or partner based on strategic fit, talent, data type, transparency, governance, integration, and economics.

Yes. It can populate systems, exercise interfaces, and test failures at scale.

With one high-value, bounded use case and a protected real-world evaluation plan.

Treating synthetic data as inherently safe or valuable without a defined purpose and rigorous validation.

Business ownership, source quality, governance, reusable capabilities, workflow adoption, and measurable outcomes.