Spokane Journal of Business

Company devises ID theft insurance as benefit

Moloney+O’Neill affiliate eyes national market

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A Spokane company that has developed an identity-theft protection plan thats offered to employees as a benefit says its finding strong demand for the plan here, and expects to start marketing it nationally soon.

The plan offered by the company, ICR Bridge LLC, an affiliate of Spokane-based Moloney+ONeill, includes identity-theft insurance and resolution services, says Mark Patrick, one of the founders of ICR and a benefits consultant with Moloney+ONeill. To help businesses deal with and deter security breaches, ICR also offers enterprise risk insurance, privacy-policy review and audits, and hack for hire technology security services through partnerships with other companies, he says.

ICR stands for Impedio, Cavi, Renovo, which is Latin for Protect, Secure, Restore, he says.

Stealing consumers identities has become big business for thieves, which in turn has led to a new breed of insurance and employee-benefits products devoted to identity-theft protection, Patrick says. Identity theft is the fastest-growing crime in the U.S., with roughly 27 million victims in the last five years, he says, citing statistics from the Federal Trade Commission. Roughly 10 million Americans fell prey to identity theft in 2006, costing them a total of $5 billion in out-of-pocket expenses.

The risks are only going to get higher and higher as we continue to move toward e-commerce and away from a face-to-face and cash society, Patrick says. Theres no question that this carries with it all kinds of potential for companies such as ICR.

ICR started offering its products last August and has enrolled 1,000 households in its identity-theft plan so far, Patrick says. The company expects to have more than 5,000 households enrolled by October. It recently added Spokane-based Sterling Savings Bank to its list of employers that are offering the plan, and expects to add a company with 1,500 employees soon, which he declines for now to name, he says.

The company also has tentative commitments from other large employers here that want to start offering the plan during their next open enrollment period for employees to sign up for the benefit, he says. In addition, ICR is in the early stages of talks with various association plans, and the company is talking with brokers at independent agencies in states such as New York, Florida, and Nebraska about selling its identity-theft protection plan. It expects to start signing agreements with brokers later this year, he says.

As part of its identity-theft coverage, ICR offers reimbursement insurance through a contract thats underwritten by Lloyds of London, the big British insurance market known for providing specialty insurance. ICR has an exclusive agreement with Lloyds and is the only company in North America that sells its particular contract, Patrick says. Coverage includes a $25,000 lifetime maximum against losses; pre-approved attorney fees; wages for lost time at work, up to $1,000 a week for a maximum of 10 weeks; communication expenses such as postage; and pre-approved travel expenses, ICRs Web site says.

ICR offers resolution services through a partnership with Identity Theft 911, which Patrick says is one of the largest providers of resolution and fraud education in the U.S. Services include unlimited access to a personal fraud specialist; help with preparing appropriate documents, filing police reports, and creating a fraud victim affidavit; ongoing identity theft education; and others, he says.

Such services can prove invaluable to victims of identity theft who dont have the time or energy required to restore their good name, Patrick says. Victims can spend as many as 300 hours straightening out their financial records and filing the necessary reports, he says.

If you were to liken it to a puzzle, where you try to connect the border pieces first, the problem is that there are no border pieces with identity theft, he says. While you can clear most financial damages, the scary thing is that its hard to really get rid of these criminals. An expert knows what needs to be done to do that.

ICR charges a premium of $5 a month per household for the identity-protection plan, which is about half the going rate for other such plans, Patrick claims. For an extra $30 a year, enrollees can add a credit- monitoring service that provides credit reports and e-mail notifications regarding changes to a credit file, he says.

Employers who sponsor the plan typically choose one of three options: buy it for their employees, buy it for key executives and make it available to the rest of their employees, or just make it available to their employees, he says.

Patrick founded the company with three other colleagues at Moloney+ ONeillPaul Belles, Mark Roff, and Mark Hausman. The four, all of whom are among the owners of the new venture, came up with the idea of creating an identity-theft protection plan in October 2006 after they were approached by vendors seeking representation for their products.

We looked at the price point and value and thought we could better serve our customers if we built our own plan and negotiated aggressive pricing, he says.

Patrick says one of the most common reasons consumers forgo identity-theft protection plans is that banks and credit-card companies typically offer limited protection to their customers already.

I thought that way, too. I thought it was too expensive, he says. Then, I looked at what it took to fix identity theft, and I decided I would buy it if it was the right product at the right price.

Patrick asserts that most banks charge a fee for the services that ICR offers. He adds that while credit laws limit a credit-card holders financial liability, credit-card companies also require prompt notification, which can be difficult considering that 60 percent of identity-theft crimes in the U.S. arent discovered for upward of a year after a victims information has been stolen. In addition, nearly 80 percent of identity-theft incidents start out nonfinancial, such as theft of a Social Security number or a drivers license, he says. ICRs services include notification of all of the parties involved, which could include government agencies, the U.S. Postal Service, and medical insurers, among others, he says.

The laws protect us, but not as much as the average consumer thinks, Patrick asserts.

In addition to identity-theft protection for their employees, employers also increasingly are interested in buying insurance for their businesses in case a breach occurs, he says. ICR markets enterprise risk insurance policies, which provide coverage when a perpetrator breaches a companys nonpublic information. A recent example would be a security breach at Great Falls, Mont.-based D.A. Davidson & Co. several months ago, when a hacker broke into a database that contained the personal information of roughly 225,000 clients, he says.

ICR also offers privacy-policy reviews and audits through a partnership with Red & Associates, a Spokane human-resources consulting firm. Businesses that offer ICRs identity-protection plan to their employees can have an on-site audit performed, he says.

In addition, ICR offers hack for hire technology security assessments through a partnership with Spokane-based Intrinium. That company tries to hack into a customers system and provides suggestions for how to fix weaknesses.

Contact Emily Proffitt at (509) 344-1265 or via e-mail at emilyp@spokanejournal.com.

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