What You Need to Know
- Millennials were the most likely to be victims.
- The fraudster was often someone the victim knew.
- Insurers need to apply fraud mitigation tools before a claim is paid, Aite says.
Close to 30% of Americans have experienced insurance-related identity theft, and the fraud seems to disproportionately affect younger workers, a new report finds.
The study, released by Aite, comes at a time when cybersecurity is a pressing issue for businesses, and follows a period where many security breaches have been reported from major companies, including health insurance plans.
“Unfortunately, data breaches have become more commonplace in recent years as fraudsters eye gaining access to a consumer’s personally identifiable information. Yet there is another sometimes overlooked to dimension fraud and that is the fraudster is often someone that is known to the victim,” said Aite Group research director Michael Trilli. “Regardless of the fraudster’s identity the current environment puts an onus on insurers to ensure their customers can transact digitally and with peace of mind.”
2 Types of Crime Studied, Many Victims
The report looked at two main types of crimes around identity theft: application fraud, when an unauthorized person uses a consumer’s identity to apply for an insurance policy, and account takeover (ATO), when an unauthorized person uses an existing insurance account in an unauthorized manner.
The data was gathered in a survey of more than 8,000 U.S. consumers age 18 or older. It found that 27% of U.S. consumers experienced insurance-related identity theft in the past two years. Of those who experienced identity theft in insurance, 22% did relative to their health insurance or dental plan, 19% with their life insurance policy or annuity, and 18% with a personal line property and casualty (P&C) policy. The largest age group of consumers that were victimized by insurance-related identity theft were between 31 and 39 years of age.