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The Rough Notes Company Inc.



February 27
14:37 2017

Greater awareness and increased risks create growth opportunities in voluntary and core benefits markets

If your agency doesn’t offer customers a chance to protect their identities—or those of your business customers’ employees—you may be missing an opportunity not only for some added revenue, but also a chance to boost client retention. According to market experts, identity theft protection is an easy sell to employers and employees and the time to promote the product might never be better.

According to Matthew Cullina, CEO of CyberScout (formerly IDT911), “The employee benefits space is the hot [identity theft protection] market right now. A Willis study that came out last spring found that about 35% of employers offered an identity theft protection product in 2015, and that number could double by next year. That’s a fast growth rate.”

Digital risks, he observes, are becoming more prominent. “Cars and homes are getting safer, but digital identities and data are getting less safe every day,” he notes. “Agents and brokers are in the risk protection business,” and identity is a risk that needs protecting.

According to Emily Rose, vice president of broker and partnership sales at LegalShield, a company that provides identity theft protection under the IDShield banner, identity theft protection can be a good starting point for employers new to the voluntary arena. “A voluntary benefit like an identity theft protection plan or group legal plan requires fewer employee decisions, administration is straightforward and easy, and so is the end-user process,” she notes. “It’s a good way for employers to dip their toes into the voluntary benefits water.”

Employer engagement

Terry Reams, general manager and senior vice president of benefit solutions at LifeLock, says, “To get employers to consider the protection—and as a former broker myself, I say this with all due respect—I’d tell agents and brokers, ‘Learn about the product and its benefits, and just start talking about them.’ This is something employees need.”

Glenn Petersen, president of business solutions for LegalShield, offers a few steps that agents and brokers should take. “Their first responsibility, in my mind, is to consult with their clients on the diverse needs of their employees,” he explains. “Make them aware of issues the product can address. Remember, identity theft could be one of the most financially catastrophic issues an employee experiences and one of the most complex to resolve.”

He also recommends talking about risk mitigation, and the role these products have in that. Reams concurs. “Risk mitigation is the big part of this product,” he says. “That’s something agents and brokers should address with employers.”

Petersen also recommends teaming up with a solid carrier. “Look for the one that offers the best value proposition,” he says. Rose agrees, adding, “All voluntary benefits products and programs are not created equal, so brokers need to really dig in and identify the differences between carriers and the products they offer.”

Reams says providers are taking a more active role in teaching brokers about products and showing how they can use them to help clients. “We are being much more proactive these days—getting out in front of brokers, not unlike your traditional ancillary or medical benefit providers,” he says.

According to Reams, there’s been a shift in how identity protection is being offered. “When we started this journey several years ago, identity theft protection was positioned primarily as a voluntary benefit,” he says. “Over the past year and a half, we’ve been effective at changing the messaging around it, getting it out of the painted corner of voluntary, and putting it in front of employers more as a core benefit that kind of meets the demands of the times that we’re in.”

He adds, “One of the new terms we’re seeing used more is ‘essential benefit.’ This really takes it in a completely different direction.” More and more employers are funding some or all of the cost of the product.

“There’s an economic benefit to offering the product—an ROI, if you will,” Reams notes. For example, if an identity theft occurs, employees are less engaged at work because they’re worrying about or dealing with the fallout. “Offering this as a paid benefit is a good way for employers to make sure all employees are covered for such an important risk,” he adds.

Cullina recommends tying identity theft protection with cyber liability discussions. “Individual consumer risks sometimes overlap with business risks,” he notes. Reams adds, “On the P&C side, cyber liability and cyber security have become much more prominent over the last few years. When you’re talking about cyber as a business risk, it’s easy to segue into a discussion about cyber-related risks employees can face.”

According to Cullina, the mitigation elements of identity theft protection products actually can help reduce business risks. “We’ve seen an increase in breaches where hackers get the credentials of somebody important in the office and start to impersonate that person,” he says. “It all starts with finding the right person to target and finding them when they’re most vulnerable. Identity theft protection products tend to make employees smarter and more aware of potential risks.”

Rose says identity theft protection products work for all employee types. “They really are designed to cover the entire workforce—everyone from white collar to blue collar, part time to full time, and across all demographics, from those newly entering the workforce to those getting ready to exit,” she says. “It is one of the most versatile of the voluntary benefits available in today’s marketplace.”

Cullina says the small to medium-sized businesses market may be a good starting point for agents and brokers. “That market may be the most exposed,” he notes. “We’re seeing more and more targeted attacks against smaller businesses, so small firms and even microbusinesses—maybe someone with an Etsy or eBay storefront—may be receptive” to discussing cyber and identity theft protection. Opportunities are plentiful, he notes, and competition is less intense.

Other firms—larger ones, in particular—may be good candidates for what Cullina calls stratified programs. “We’ve tiered programs by either executive to staff or high-risk to staff,” he explains. “For example, we’ve rolled out programs where employees in the finance office, who have signing authority and sometimes have to put their Social Security number on corporate documents, get a higher level of benefits, and the company is willing to pay for that due to the greater exposure.”

Employee success

Employees certainly find value in the product. “It’s tangible,” Cullina says. “It’s a tool people can use to check their credit, and check their credentials across different identity databases. It gives them real world feedback immediately. It’s not a passive product, like a lot of insurance offerings.”

Employer support makes it easier to get employees on board. “Engaging more employees starts with employer buy-in,” says Matthew Vitelli, senior manager, partner marketing, at LifeLock. “Employers can give you access and can make it easier to communicate with and educate employees.”

Educate, educate, educate. “It’s important to make sure employees know the plan can help them, not only when they are a victim of identity theft, but also when it’s not top-of-mind and the protection element is working,” Rose says. “Educating employees is key to a successful enrollment.”

She identifies a number of ways to educate employees and boost awareness. “You can use anything from educational questionnaires and in-person workshops to videos and webinars and more,” she explains. “There are a lot of things an agent or broker can do from a very consultative perspective.”

Storytelling also is successful “A big part of what we do is sharing stories and case studies about how risks are evolving and what the newest trends or hacks or fraud schemes are,” explains Cullina. Reams agrees. “It helps to showcase what happens after a theft and what it takes to get your identity back,” he says. “That’s when the light bulb goes on.”

If a fellow-employee has been a victim, all the better. “If someone in the audience raises their hand and says, ‘Yeah, this is what happened to me,’ that’s when the landslide begins and additional employees jump on the bandwagon,” Reams says. “When brokers are talking to the employees, ask if anyone has had their credit card stolen or something else happen. You can almost bet two or three hands will go up. If you can get them to share their story, that’s gold.”

Petersen stresses the importance of using diverse marketing tactics. “Make sure you use a combination of educational workshops, enrollment meetings, collateral material for employees, and other communication tools that meet the needs and preferences of a multi-generational workforce,” he says.

Rose concurs. “Studies show that having a multifaceted communication approach is more and more important to address the various age ranges in the workforce right now,” she says. “Your communication plan needs to address the entire audience.” She notes that providers have marketing materials, campaigns and strategies that they’ll share with agents and brokers to boost enrollment success and to ensure that employees get value from the benefit they signed up for.

Vitelli’s firm has developed a product selector questionnaire that an employee can take to analyze risks. “It’s an awareness quiz that educates employees and also points them to the right product for them, based on their responses,” he says. “It’s one more way to get in front of someone; every time we educate someone, they see the value in the products.”

To get employees engaged—to actually sign up for the protection—agents and brokers can go in one of a couple directions. Many employers offer it along with all of the other voluntary benefits they make available, often in conjunction with and at the same time as their health care enrollment. Others take a different approach.

“It can be offered on its own, separate from other voluntary benefits,” says Rose. “That way, it doesn’t get lost in the clutter. As a result, you can really drive home the value of the benefit to employees through a robust communication plan.”

“If an employer is willing to go off-cycle and promote it separately, we’re all for that,” adds Reams. “That lets us bring all kinds of tools and resources to the dance. If we do it on cycle, all we ask is that they just give us the time necessary for people to understand it.”

Sometimes a hybrid approach works best. “We have a lot of employer groups who start a plan off-cycle as the initial offering, so they can hone in and focus more on employee communications and education,” Rose adds. “Then, they mirror it up to the open enrollment ballot period going forward.”

Most important, says Reams, is attention. “Whether you call it a voluntary, essential, or core benefit, it’s important that employers give this product the same type of focus—although it’s much easier to talk about—as they give the other core benefits,” he explains. “In today’s world, this is an essential benefit.”

Cullina stresses the importance of frequent and relevant communication. “Regardless of when enrollment is, it helps to be able to market to employees several times throughout the year,” he says. “Someone may not be ready to buy at one time, but a few months later, something could happen to change that.” He recommends using timely triggers—tax-related identity theft or fraud in tax season, shopping-related theft during the holidays, travel-related issues at vacation time, for example—to stay top-of-mind.

He cites a few added benefits—more than just extra income—agents and brokers can realize from selling identity theft protection. “First, it can be a foot in the door. Today, you could be offering employees identity theft protection; tomorrow it could be auto, home, or pet insurance—or any other product you offer.

“The digital communication connection is a major retention play,” Cullina adds. “People recognize that you’re actively communicating with them once a month and that delivers huge revenue and retention value that, again, should inure to other relationships you have with the employer and employee.”

By Dave Willis, CPIA

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