Broker Check

insurance Related Identity Fraud

August 17, 2021
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According to a study by the Alte Group, reviewed on the NU Property Casualty 360 website (https://www.propertycasualty360.com/2021/07/20/study-more-than-one-quarter-of-consumers-report-being-victim-of-insurance-related-id-theft-414-206162/), almost 30% of Americans have been impacted by insurance fraud due to identity theft.

The report looked at two types of fraud: application fraud (unauthorized use of another person's name to apply for insurance) and unauthorized takeover of an existing account.

Of over 8,000 U. S. consumers surveyed, 27% experienced insurance  related identity theft in the past two years. 22% of thefts were related to health and dental insurance, 19% to life insurance or annuities, and 18% to personal lines.

Contrary to the conventional wisdom that fraud targets are mostly senior citizens, the largest victim age group was 31-39. The most likely perpetrators were family members and associates. 38% of victims claimed to be knowledgeable about scams. 

The report included recommendations for insurers:

  • Have an end-to-end fraud fighting strategy, using mitigation tools before a claim is paid.
  • Use newer authentication methods such as biometrics (pay attention to privacy laws when collecting information).
  • Develop a robust, transparent recovery process.
  • Educate consumers, including warnings not to disclose personal information to family and friends.