Employee benefits increasingly include identity theft coverage

Early adopters find cyber insurance creates security that benefits both worker and employer

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Employ­ers look­ing to dial up the cor­rect mix of ben­e­fits in order to retain val­ued employ­ees are increas­ing­ly includ­ing iden­ti­ty theft pro­tec­tion ser­vices as a perk.

Research firm 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 ben­e­fit over the next cou­ple of years.

Relat­ed: More employ­ers offer­ing ID theft pro­tec­tion benefits

Third­Cer­tain­ty recent­ly sat down with Joel Ray, CEO of New Ben­e­fits, a Dal­las-based employ­ee ben­e­fits solu­tions provider, to dis­cuss the drivers—and the going-for­ward arch—of this trend. The text has been edit­ed for clar­i­ty and length.

3C: Iden­ti­ty theft has become part of the lex­i­con of the world we now live in.

Joel Ray, New Benefits CEO
Joel Ray, New Ben­e­fits CEO

Ray: With all the hack­ing of cor­po­ra­tions, health plans and gov­ern­ment, there is a myr­i­ad of ways peo­ple can get their iden­ti­ties stolen and mis­used, whether it’s med­ical fraud, tax return fraud, steal­ing a Social Secu­ri­ty num­ber, or a cred­it card infor­ma­tion scam.

To me, not pro­tect­ing your­self with an iden­ti­ty theft pro­tec­tion ser­vice is com­men­su­rate with not lock­ing your door and set­ting an alarm when leav­ing home, or not buy­ing life insur­ance to pro­tect your fam­i­ly. It just makes all the sense in the world, when you have the abil­i­ty and a prod­uct is avail­able to address iden­ti­ty theft, to include this as an employ­ee benefit.

3C: So how do employ­ers view this?

Ray: Employ­ers were the first ones decades ago to offer health insur­ance to their employ­ees, and ear­ly adopters have added oth­er types of ben­e­fits over the years. The idea, of course, is to attract and retain good peo­ple . … Research shows an employee’s finan­cial health is every bit as impor­tant as phys­i­cal and men­tal health. If any­thing goes wrong (finan­cial­ly,) they are not going to be a pro­duc­tive work­er. Mean­while, iden­ti­ty theft hap­pens every two sec­onds in the U.S. to quite a large num­ber of Amer­i­cans. So, iden­ti­ty theft pro­tec­tion is some­thing that, in today’s dig­i­tal world, makes per­fect sense to pro­vide employ­ees, either on an employ­er-paid or pay­roll deduc­tion basis.

3C: How much of a chal­lenge is pub­lic awareness?

Ray: The hard part is the edu­ca­tion. Yet the almost dai­ly reports about breach events have got­ten employ­ers more inter­est­ed. We’ve had many (ben­e­fits) bro­kers rep­re­sent­ing our prod­ucts say, that for the first time, employ­ers are ask­ing for iden­ti­ty theft protection.

It real­ly is the bro­kers in today’s world who act as con­sul­tants regard­ing the lat­est and great­est new prod­ucts. And, typ­i­cal­ly, iden­ti­ty theft is toward the top of the list, if not at the top of the list.

3C: How does improved pro­duc­tiv­i­ty fac­tor in?

Ray: Iden­ti­ty theft pro­tec­tion is like any oth­er ben­e­fit. Basi­cal­ly, any­thing you can do to pro­vide finan­cial secu­ri­ty to your employ­ee is a good thing. It’s a pri­ma­ry rea­son employ­ers pro­vide 401Ks. A lot of vol­un­tary ben­e­fits, like can­cer dis­abil­i­ty, crit­i­cal ill­ness and den­tal, charge a lot more for fam­i­ly cov­er­age. This one charges a lit­tle bit more, but you get finan­cial secu­ri­ty and pro­tec­tion, not only for the employ­ee, but for the entire fam­i­ly as well. It’s a very inex­pen­sive ben­e­fit rel­a­tive to the pro­tec­tion it offers, and I think it will become a sta­ple of the indus­try in the very near future. The ear­ly adopters who pro­vide this ben­e­fit to their clients now are going to have mar­ket advan­tage over those who wait.

3C: Sort of like sup­ply­ing peace of mind as a benefit?

Ray: Yes. For exam­ple, employ­ees buy life insur­ance for peace of mind so the fam­i­ly is pro­tect­ed in case of an untime­ly death. With iden­ti­ty theft pro­tec­tion, employ­ees and their fam­i­lies are pro­tect­ed from some­thing that hap­pens every day from thieves who always seem to be one step ahead and out of reach from the law. If you’re an employ­er, wouldn’t you rather offer your employ­ees a ben­e­fit that will mean­ing­ful­ly pro­tect them from finan­cial harm ver­sus oth­er ben­e­fits that, based on the his­tor­i­cal record, may not add any real value?

More sto­ries relat­ed to iden­ti­ty theft insurance:
As threats mul­ti­ply, cyber insur­ance and tech secu­ri­ty indus­tries start to merge
Cyber insur­ance indus­try could face turf war, report warns

NAIC sets mod­el stan­dard for con­sumer rights, cybersecurity


Posted in Identity Theft, Q&A