Nearly every adult in the United States has at least one form of insurance. Insurance is mandatory if you own a car or borrow money to purchase a home, and you might also invest in policies to cover your healthcare expenses or ensure your loved ones are taken care of if you unexpectedly pass away.
The issue is that insurance requires you to hand over personal information to the company that will provide your coverage. Supplying this information isn’t anything out of the ordinary, but it means you’re trusting a third party to protect your data and prevent it from falling into the wrong hands.
Cybercriminals are well aware of the data insurance companies collect, making these organizations a popular target for their schemes. This information is incredibly valuable, so criminals will do everything possible to get a hold of it.
Cyber security is essential for insurance companies because it helps keep this data safe. Criminals are continually developing new techniques, though, so insurers must address any security weaknesses they have to maintain customer trust.
Every firm in the insurance industry should employ a cyber security strategy as part of its regular business protocols. This guide examines ways cyber security in the insurance industry can keep client information private.
Why Cyber Security Is Essential to the Insurance Industry
The intersection of cyber security and the insurance industry is integral to the safety of customer information. As insurance companies collect extensive and valuable customer data ranging from social security numbers to medical records, they must be vigilant in safeguarding this information from potential cyber security breaches. Cybercriminals, in turn, are well aware of the value of this information and can find ways to exploit vulnerabilities in the system to access it. Thus, it becomes essential for insurance companies to have reliable cyber security policies to prevent any unauthorized access or theft of customer data.
Moreover, insurance companies face not only monetary risks but also reputational risks in case of any cyber attack. A single data breach can be detrimental to the trust customers place in the company, leading to potential legal consequences, loss of business, and damage to reputation. The financial cost of a data breach can also be tremendous, with many companies having to shell out thousands of dollars to rectify the breach and prevent such attacks in the future.
With the ever-increasing risk of cyber threats, it has become crucial for insurance companies to treat cyber security as a top-priority investment. They should establish strong security measures to protect customer data proactively, regularly update these measures to reflect emerging threats, and invest in the latest cybersecurity technologies. By taking these measures, companies can prevent financially damaging breaches and maintain their customers’ trust in their services. Some reasons cyber security is crucial to insurance companies include the following:
Companies Store Sensitive Information
Insurance companies deal with a vast amount of sensitive customer information, from their addresses to medical and financial history, employment details, and credit scores. Hackers can use this data for nefarious purposes, making it imperative for insurance companies to implement robust cyber security policies. With 82% of the country’s top insurance firms vulnerable to phishing attacks, according to a report by cyber risk monitoring firm Black Kite, it is essential for insurers to invest in proper security measures. Failure to keep this information secure puts both customers’ privacy and the company’s reputation at risk. Therefore, it is critical for insurance companies to develop a comprehensive cyber security plan to guard against any unauthorized access or theft of sensitive information.
Data Comes in Multiple Forms
The data insurance companies accumulate can come via various methods, making it challenging to secure. Some clients might fill out physical paperwork, which an agent will then enter into a company portal, while others might complete online forms or send emails when arranging their policies. Any cyber security technology an insurance company uses should keep these various data collection methods in mind and address each of them.
Staff Doesn’t Have Security Knowledge
Most insurance agents have little cyber security knowledge. This lack of understanding and training could make these companies more prone to cyberattacks through phishing and ransomware scams that rely on user error. Insurance firms need cyber security software because they can’t always rely on their staff to protect their systems.
Reputation Is Key
Cyber security is essential to the insurance industry because it can help protect a company’s reputation. An insurance company’s success is based on trust, and once that trust is gone, it can be nearly impossible to recover. Firms can protect their reputation by having a cyber security strategy in place.
Insurance companies can’t have customer information floating around without taking the necessary precautions. Incorporating some cyber security solutions is essential as these companies become targeted at more significant rates.
Four Cyber Security Solutions the Insurance Industry Can Use
Insurance companies are often willing to pay ransom during a ransomware attack. CNA Financial, for example, paid $40 million after an attack, but using the available technology might have prevented this issue. Some solutions insurance companies can use moving forward include:
1. Artificial Intelligence
Artificial intelligence (AI) cyber security tools can identify vulnerabilities, threats, and attacks and respond without human intervention. Insurance companies have massive amounts of data passing through their systems, so automating the security process as much as possible makes sense because of the time and effort it saves. AI also uses machine learning to recognize patterns and deviations from the norm, improving its performance over time.
2. Real-Time Analysis
Cyber threats have become an unfortunate reality for many businesses, including insurance companies. However, monitoring a system in real time can go a long way in minimizing the damage caused by these attacks. Cybersecurity software is a powerful tool that can help in identifying potential threats and breaches before they become serious. This is achieved through constant monitoring of network traffic, identifying any suspicious activities, and taking action to prevent any further damage.
By regularly scanning the system for threats using the latest technology, companies can detect any attacks even before they occur. It also helps in identifying data patterns and anomalies in the system, which could indicate a potential intrusion attempt. With a proactive approach to cybersecurity, companies can protect their customers’ information and their own reputation. By investing in reliable cybersecurity software, insurance companies can provide their customers with the peace of mind that their sensitive data is well-protected. Ultimately resulting in a more secure and safe system, lessening the risk of data breaches or cyber-attacks that could potentially be costly, both in terms of financial loss and damage to reputation.
3. Access Control
Access controls define who can access company information and resources. Limiting the number of employees with access to specific files can help keep data safer, and these controls also authenticate every user entering the system. Offering fewer people access to company information makes it less likely something will leak in the future.
4. Employee Training
Perhaps the simplest way to integrate cyber security in insurance industry protocols is by training employees to identify potential threats. Phishing and ransomware schemes often come through emails, for example, and insurance companies are prone to these attacks because they receive so many inquiries from potential clients daily. Teaching employees not to open suspicious emails or click on links can provide basic security for the system and limit the risk this communication method creates.
Cybercriminals are becoming more sophisticated and advanced every year, creating challenges for insurance companies trying to stop them. There’s a significant need for startups to address these cyber security and insurance industry needs, as the industry is too large and too important to ignore.
Growth in the Cyber Security Industry
The number of global cyber attacks grows dramatically every year, and the insurance industry is becoming a significant target. Companies in this industry need tailored solutions to keep their data safe, making it a market for startups to consider. Insurance providers are under significant pressure to embrace technology, so they’ll need to protect their infrastructure in new ways moving forward.
Option3 brings cyber security startups and investors together to help fund the next wave of industry innovation. We understand the unique challenges businesses of all types are experiencing and seek investments in companies addressing national priorities. Contact Option3 for more information on cyber security investment.