More employers offer identity theft protection as part of benefits package

ID theft protection as an employee perk fits shifting lifestyles, boosts retention

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It’s a trend reflect­ing the chang­ing pref­er­ences of an increas­ing­ly diverse U.S. work force.

U.S. employ­ers are increas­ing­ly offer­ing so-called “vol­un­tary ben­e­fits and ser­vices,” or VBS, as a car­rot to retain val­ued employ­ees. VBS includes things like crit­i­cal-ill­ness insur­ance, stu­dent loan repay­ment pro­grams and even pet insur­ance, perks that are above and beyond core health care benefits.

What’s more, some­thing you might not have expect­ed has emerged as the hottest VBS on the plan­et: iden­ti­ty theft protection.

Com­pli­men­ta­ry webi­nar: How iden­ti­ty theft pro­tec­tion has become a must-have employ­ee benefit

A recent Willis Tow­ers Wat­son sur­vey of 317 com­pa­nies employ­ing 9.2 mil­lion work­ers found that 92 per­cent of U.S. employ­ers believe VBS will be impor­tant to their employ­ee val­ue propo­si­tion over the next three to five years, up from 73 per­cent in 2015.

Mary Tavarozzi, Group Benefits practice leader at Willis Towers Watson
Mary Tavarozzi, Group Ben­e­fits prac­tice leader at Willis Tow­ers Watson

In the past, employ­ers have focused VBS pro­grams on the needs of baby boomers,” says Mary Tavarozzi, Group Ben­e­fits prac­tice leader at Willis Tow­ers Wat­son. “Now employ­ers need to attract, retain and engage mil­len­ni­al employ­ees, who have very dif­fer­ent needs and pri­or­i­ties. They also are begin­ning to rec­og­nize that help­ing employ­ees with finan­cial well-being ear­ly in their careers may con­tribute to a more engaged work force.”

Here’s what’s mild­ly sur­pris­ing: Willis Tow­ers Wat­son pre­dicts iden­ti­ty theft pro­tec­tion, offered by 35 per­cent of employ­ers in 2015, could dou­ble to near­ly 70 per­cent by 2018, which would make it the fastest grow­ing type of employ­ee perk over the next cou­ple of years.

Gain­ing traction

This shift can be tied direct­ly to our increas­ing reliance on all things dig­i­tal, espe­cial­ly cloud ser­vices, mobile com­put­ing and social media, which, in turn, has trans­lat­ed into a tor­na­do of nasty secu­ri­ty and pri­va­cy exposures.

Thus, iden­ti­ty theft pro­tec­tion as an employ­ee ben­e­fit is no longer con­sid­ered a nov­el idea, and the will­ing­ness of employ­ers to include it as an employ­er-paid option is fast gain­ing trac­tion, observes Ben Rozum, co-founder and direc­tor of strat­e­gy and devel­op­ment at Genius Avenue, a ben­e­fits man­age­ment company.

Ben Rozum, Genius Avenue co-founder and director of strategy and development
Ben Rozum, Genius Avenue co-founder and direc­tor of strat­e­gy and development

From an employ­er stand­point, offer­ing this pro­tec­tion enhances the ben­e­fit offer­ing, help­ing to increase recruit­ing and reten­tion efforts,” Rozum tells Third­Cer­tain­ty. “It shows a com­mit­ment to, and lev­el of car­ing for, their employ­ees on a more holis­tic approach.”

Often a human resources man­ag­er is the first to grasp this notion and take the lead in research­ing iden­ti­ty theft pro­tec­tion ser­vices. Increas­ing­ly, good infor­ma­tion is being brought for­ward by bro­kers and sales reps who rec­og­nize a good thing when they see it.

Word spreads

These mar­keters are guid­ing HR man­agers to “a strong under­stand­ing of the prod­uct fea­tures and the need that it solves, result­ing in full sup­port for the pro­mo­tion and engage­ment to dri­ve employ­ee enroll­ments,” Rozum says. “Giv­en the estab­lished dis­tri­b­u­tion process with­in the employ­ee ben­e­fits chan­nel, bro­kers and con­sul­tants who focus on both core prod­ucts and vol­un­tary ben­e­fits are active­ly engaged in help­ing to pro­mote the ben­e­fits of iden­ti­ty theft pro­tec­tion pro­grams to their clients.”

Jody Sevy, Solid Nine Solutions managing partner
Jody Sevy, Sol­id Nine Solu­tions man­ag­ing partner

The bro­kers and sales reps spread­ing this gospel include employ­ee ben­e­fits bro­kers, pay­roll ser­vices reps, and com­mer­cial insur­ance agents, says Jody Sevy, man­ag­ing part­ner at con­sul­tan­cy Sol­id Nine Solutions.

It’s easy for them to make a piv­ot to sell­ing iden­ti­ty theft pro­tec­tion pack­ages to employ­ers,” Sevy says. “They see it as some­thing close­ly relat­ed to what they are already sell­ing, so it’s rel­e­vant, but yet it doesn’t con­flict with their main line of prod­ucts. It’s complimentary.”

Mag­ic formula

Under­ly­ing all of this fresh activ­i­ty is a con­flu­ence of devel­op­ments. Aware­ness of net­work breach­es and iden­ti­ty theft scams con­tin­ues to steadi­ly expand as cyber attacks have become a sta­ple of news cov­er­age. Most con­sumers now have some lev­el of under­stand­ing of the ero­sion of pri­va­cy with respect to their dig­i­tal lives and the resul­tant ris­ing expo­sure to iden­ti­ty theft and cyber scams.

Mean­while, employ­ers seek the mag­ic for­mu­la to keep work­ers hap­py, pro­duc­tiv­i­ty high and ben­e­fits costs low. Along with that, more secu­ri­ty ser­vices ven­dors rec­og­nize the mar­ket oppor­tu­ni­ty and are step­ping for­ward with an array of ser­vice offer­ings geared to employers.

The con­cept of expand­ed choice and per­son­al­iza­tion goes hand in hand with employ­er efforts to engage employ­ees in ben­e­fit and health care deci­sions,” Tavarozzi says. “It’s hard to deny the attrac­tive­ness of cost-effec­tive pro­grams and ser­vices that meet employ­ee needs and increase the val­ue of ben­e­fit programs.”

Put anoth­er way, employ­ers are dis­cov­er­ing that it is pos­si­ble to clear­ly visu­al­ize a tan­gi­ble return on invest­ment for spend­ing com­par­a­tive­ly lit­tle to add iden­ti­ty theft pro­tec­tion ser­vices as a vol­un­tary ben­e­fit, Sevy says.

Sev­er­al stud­ies quan­ti­fy the hours lost recov­er­ing from com­mon types of iden­ti­ty theft attacks. A wide­ly cit­ed 2003 study by the U.S. Fed­er­al Trade Com­mis­sion found that, on aver­age, iden­ti­ty theft vic­tims spent 30 hours resolv­ing their prob­lems; vic­tims of so-called new account fraud, in which per­son­al infor­ma­tion is used to open and abuse lines of cred­it, spent 60 hours resolv­ing their problems.

Wor­thy perk

Mak­ing iden­ti­ty theft pro­tec­tion ser­vices avail­able to an employee’s entire fam­i­ly can dra­mat­i­cal­ly reduce this recov­ery time and great­ly relieve stress, Sevy says. And ongo­ing aware­ness and secu­ri­ty train­ing pro­grams can improve pro­duc­tiv­i­ty as well.

You could call it pro­duc­tiv­i­ty insur­ance,” Sevy says. “It is a finan­cial well­ness perk that the employ­er can extend to an entire fam­i­ly, and the cost is a drop in the bucket.”

Rozum pre­dicts U.S. employ­ers will increas­ing­ly add iden­ti­ty theft pro­tec­tion ser­vices to the mix of employ­ee ben­e­fits a cou­ple of dif­fer­ent ways, going forward.

  • Employ­ee paid. Employ­ers make iden­ti­ty theft pro­tec­tion avail­able through pay­roll deduc­tion mech­a­nisms. The employ­er clear­ly con­veys why work­ers should take advan­tage and also makes the sign-up and ongo­ing admin­is­tra­tion process user-friendly.
  • Employ­er paid. Employ­ers rec­og­nize the dig­i­tal world we live in and see tan­gi­ble val­ue added to recruit­ing, reten­tion and productivity.

With all the mar­ket aware­ness on cor­po­rate breach­es, the deci­sion to offer iden­ti­ty theft pro­tec­tion as a vol­un­tary ben­e­fit is becom­ing an eas­i­er deci­sion to make,” Rozum says. “At this point, the ear­ly adopters are those who tru­ly see the val­ue and are pro­vid­ing the ben­e­fit as an employ­er-paid offering.”

More sto­ries relat­ed to cyber insurance:
Chal­lenges and oppor­tu­ni­ties ahead for cyber insur­ance industry
Cyber insur­ance indus­try could face turf war, report warns
New expo­sures for SMBs spurs new need for cyber lia­bil­i­ty insurance

 


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