Identity Theft Concerns Produce Promising Market for Information Protection Insurance
A national survey conducted by graduate students at Boston University finds that identity theft is widely known and feared and that people are willing to pay to protect themselves from it.
Boston, MA (PRWEB) June 27, 2005 -- Americans willing to pay for a personal
information protection insurance plan expect to pay $88 annually, according to
graduate student researchers at Boston University. The researchers link the
public’s rising concerns over information security to increased media coverage
of identity theft and recent security breaches at national data centers.
“Experts estimate that $53 billion is lost annually to identity theft,”
says student researcher Joshua Storch. “Our goal was to see if consumers realize
the risk this poses to them. From our survey, it’s clear they
do.”
Through an online survey of 1,049 US adults, the students found that
more than four in five of Americans agree that identity theft “is a major
problem in the United States.” Nearly a third of us - 31% - are very concerned
that identity theft could happen to us in the next five years. And when offered
the option to pay for an insurance policy that would take care of their credit
history, bank accounts and credit accounts in the event their identity was
stolen, 72% indicated they were willing to pay at least something.
How
much people are willing to pay varies dramatically. While the average among
would-be payers was $88 a year, half the population was only interested in
contributing $50 or less for their own protection. A scant few, or 22%, were
willing to pay $100 or more a year. These most willing purchasers were young
professionals with average incomes of $45,000 and above.
Willingness to
pay comes as good news to companies developing exactly this kind of insurance
plan, but the low dollar amount may not be sufficient to cover the cost of
cleaning up after someone’s identity has been compromised. RelyData, LLC, a
Chicago-based firm that offers identity restoration services, for example, works
directly with employers to offer its resolution services as a corporate benefit
- keeping the cost reasonable while providing effective coverage. Garnet Steen,
President of RelyData, explained, “While credit reports and monitoring could be
purchased for around $100 per year, these are merely notification services, and
do nothing to help a victim of identity theft remove fraudulent entries in their
records and restore their identities. Identity restoration may cost more than
monitoring but provides far greater benefit.”
Mr. Steen went on to
explain why offering RelyData’s 'Identity Shield' resolution services as an
employee benefit makes sense, “Employers pay over $1,000 per incident in lost
productivity when employees perform a do-it-yourself resolution. By providing
identity theft resolution as an employment benefit, the cost is spread out
across a large group. Each individual can receive this protection for as little
as $10 per year, while employers reap the reward of a benefit that pays for
itself many times over in saved employee time.”
It would seem, based on
the students’ primary research, that RelyData and other firms like them are on
the right track. Consumers area aware of the danger and willing to pay to
protect themselves -- but as with anything else, they want to keep costs low.
About the Survey
The survey was conducted online during the third
week of March, 2005. The sample of 1,049 participants (463 male, 586 female) was
provided by online panel company Survey Sampling International, Inc. and the
survey was conducted using Global Market Insite’s online survey tool, Net-MR. As
an online survey, the opinions reflected here only represent the two-thirds of
households with regular Internet access. For comparison, the margin of error for
a randomly selected sample this size is +/- 3%.
About the College of
Communication at Boston University
The College of Communication at Boston
University is home to the Communication Research Center where professors train
undergraduate and graduate students in the science of consumer research and
analysis. This project was designed by students under the supervision of
Professor James McQuivey.
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Source : http://www.prweb.com/releases/2005/6/prweb255052.htm