Posted on 13 November, 2019A new report reveals that the Identity Theft Insurance market is booming. Currently valued at around $6.6 billion globally it is expected to reach $17 billion by the end of 2024, growing at a CAGR of 17 percent.
This is unsurprising since identity fraud itself is also growing. In fact, the most recent figures from Cifas show that 500 people in the UK have their identities stolen each day – and this is only the reported cases, so the problem is likely to be much, much higher. It also doesn’t include cases of deceased identity fraud, where criminals use the personal information of people that have died to commit fraud.
Identity theft insurance is a relatively new product which covers the costs related to identity theft. It reimburses victims for money spent on reclaiming their financial identities and repairing their credit reports. Those costs can range from phone bills to legal help and reimbursing the amount of money that was stolen. However, many experts are questioning its value in that credit providers refund victims automatically and credit reference agencies will update reports free of charge once the theft is proven.
Whilst the jury is out on whether consumers should invest in insurance; surely the more pressing concern is in finding ways to reduce identity theft. An increase in consumer awareness campaigns are helping to inform vulnerable customers about phishing scams and help them to keep their personal information safe and organisations are increasingly looking at ways to stop identity fraud at the source – i.e. when applications for credit are made. In the last year organisations have prevent £1.3bn in fraud losses through non-competitive data sharing or putting safeguards into place such as flagging applications made in the name of someone who is known to have passed away.
The old adage is true prevention is better than a cure so rather than take a sticking plaster approach to identity theft through insurance more needs to be done to tackle the actual problem.