When Melissa McCarthy scammed Jason Bateman in “Identity Thief” earlier this year, it was fairly funny. However, when your client experiences identity theft, it’s no laughing matter.
Between 12 million and 15 million Americans had their identity stolen last year, with a heavy concentration in November and December due to the increase in online shopping, according to the US Justice Department. The average theft costs victims between $3,600 and $5,400, as well as an estimated 300 hours of their life.
However, by recommending the right policies this winter, producers could stand to gain some extra holiday cash and help clients protect their own.
Identity protection insurance, pitched as a voluntary employer benefit, can provide peace of mind to both employers and employees, as well as offer tangential revenue to producers. Identity protection insurance provides reimbursement to victims for the cost of restoring their identity, as well as expenses like phone bills, lost wages and even attorney fees.
The demand is there as well, according to a LifeLock poll of producers. Nearly 60% of respondents indicated that commercial clients were requesting information or expressing interest in identity protection benefits, particularly in the approach to 2014 changes in the medical arena due to the Affordable Care Act.
The cost to employers isn’t bad, either. LifeLock estimates that voluntary group benefits for identity protection through its coverage ranges from $7 to $20 a month, with most policies offering coverage of up to $1mn.
So which clients stand to benefit most from identity protection coverage? Research indicates that area and company size matter.
According to data from the Federal Trade Commission, residents in Florida are at the highest risk of identity theft, with 361.3 incidents reported per 100,000 residents in 2012. That far outstrips Georgia’s 193.9 complaints, which took second place the same year. California, Michigan and New York round out the top five states for identity theft.
And because larger employers are often targeted directly by vendors, producers are best served by focusing on the small- to medium-sized market. Employers in this market have the most to lose from identity theft, said Greg Meyer of N.C.-based Worksite Benefit Advisors.
“Brokers really need to show employers the impact that ID theft plays on lost productivity caused by ID theft of an employee,” Meyer said. “If you have an employee whose identity is stolen on the road, this not only impacts that company’s corporate credit card account, it impacts productivity because the road warrior will be off the road coping with the stress and drama that goes along with trying to recover and recoup his or her credit.”