Originally posted January 20, 2015 by Melissa A. Winn on www.ebn.benefitnews.com.
With employee news feeds brimming with headlines about recent computer hacks and data leaks, employers are showing a growing interest in offering identity theft protection services as a benefit to their worried workforce. Benefit industry experts say the relatively inexpensive voluntary benefit is not only highly-appreciated by employees, but it can also act as a differentiator in a benefit adviser’s sales portfolio.
Employer concern about employee identity theft has been on the uptick recently, says Nick Park, voluntary benefits specialist at Corporate Synergies. “It has definitely been a topic of conversation more in the last year,” he says.
Identity theft fraud claims a new victim every two seconds, according to the 2014 Identity Fraud Report issued by financial research firm Javelin Strategy and Research. The Bureau of Justice Statistics, the government research agency for the Justice Department, found that 16.6 million American adults experienced identity theft in 2012 alone.
“In a group of 10 people there’s always at least one or two people who have a personal experience with an identity theft situation in some form or fashion,” says Kelly Fristoe, president and CEO of Financial Partners in Wichita Falls.
Fristoe sells the identity theft product LifeLock, which can be sold to individuals or offered to groups as a value added voluntary or employer paid product.
“[T]here are agents I know that do sell a ton of it,” he says. “Theirs and my experience is that it is a high-value product.”
While some employers choose to add identity theft protection services as a new benefit offering in their voluntary benefit package during annual open enrollment, Park says employers have also approached his firm for information on the benefit throughout the year, particularly if somebody in the organization suffers from an identity theft.
“They don’t want that to happen to any other employee in their organization,” he says.
Employees rely on their employer for “a host of financial needs: planning for retirement, protecting against the costs of health care, or even accidents and illness; not to mention, their paycheck. Identity theft can represent a threat to all aspects of financial security and is right in line with benefits [employer clients] can offer their employees,” according to identity theft protection services provider LifeLock.
Employee satisfaction
“It is a ‘nice to have’ benefit,” says Park. “I don’t know if it would be considered a necessity at this point, but employees like it.”
The monthly premiums are usually pretty affordable, he says and the benefit “typically has very little dissatisfaction once you have placed it in the employee population,” says Park. “It’s not something I hear negative feedback on ever.”
For benefit advisers, identity theft protection can be a good differentiating benefit offering, and “is a simple tool to give your clients satisfaction.”
With some insurance products there is a risk, he says, but not so much with identity theft protection.
“Sometimes, when you introduce a product to an employee population it may be complex or confusing and people don’t understand it, they don’t understand the coverage type. [Identity theft protection] is something everybody understands,” says Park.