Identity Theft Insurance Offers Protection in an Increasingly Digital World

By Eastbridge Consulting Group, Inc.

Online shopping, cell phones and credit cards make life easier for millions of Americans but they also make it easier to fall victim to identity theft and fraud. The Federal Trade Commission reports recorded instances of identity theft have soared by 584% over the last 20 years. Credit card fraud is the most common type of identity theft with nearly half a million cases reported last year, while more than 422 million people were impacted by data breaches in 2022 a 44% jump from 2021. And it’s costing us a lot of money: $20 billion last year, according to a report by Javelin Strategy & Research.

It's no surprise, then, that identity theft protection insurance has become a popular voluntary benefit. In fact, it has the highest sales potential index calculated by comparing the percent of employers that don’t offer it and the percent interested in offering it on a voluntary basis of all nontraditional insurance products.

Employee ownership of identity theft protection is the highest of all additional products, according to Eastbridge’s 2023 “Market Vision™ The Employee Viewpoint©” report. Ownership of these voluntary benefits hasn’t quite recovered to pre-pandemic levels, possibly due to inflation pressure on employee wallet share.

Employees who don’t own identity theft protection show a strong interest in buying it, even if they have to pay the premiums themselves: Of the 80% of employees without this coverage, 45% are interested in purchasing it on a voluntary basis. That level of interest is significantly higher than employees mention for other additional products.

Employers have an opportunity to create more competitive benefits packages without affecting their bottom line by offering identity theft protection. The 2022 “Market Vision™ The Employer Viewpoint©” study shows 73% of employers aren’t currently offering this coverage. Only 2% of those that do offer it pay the full cost of the premiums, and another 12% share the cost with employees.

Brokers name identity theft protection as one of the top two nontraditional products they sell, according to this year’s “Voluntary Benefits: Brokers Back in Business” Spotlight™ report. More than half of voluntary brokers 56% say they sell it on a regular basis Benefit brokers list it second at 46%, just behind wellness programs.

Carriers offer identity theft protection more than any other nontraditional product except mental health benefits, and tied with financial wellness tools and programs. Carriers most often build the benefit into another product, according to the 2022 “Voluntary Product Trends” Frontline™ report. They also often offer this coverage through partnerships with specialty providers, which sell the majority of identity theft plans.

Identity theft can have serious, long-lasting effects for those who fall victim to it. In an increasingly digital environment, identity theft insurance can offer valuable protection for employees, and an important benefit addition for employers, brokers and carriers.

Eastbridge is the source for research, experience, and advice for companies competing in the voluntary space and for those wishing to enter For over 25 years, they have built the industry’s leading data warehouse and industry specific consulting practice Today, 20 of the 25 largest voluntary/worksite carriers are both consulting and research clients of Eastbridge.