This post is part of a series sponsored by AgentSync.
Data is at the core of the insurance industry. Insurance organizations of all sizes, from the smallest independent agency to the largest traditional insurance company, store data. This includes distribution channel data, such as information collected and stored to license and appoint insurance companies and adjusters, as well as consumer data collected by these companies in the course of selling insurance policies. Masu.
Well, the insurance industry runs mostly on data. However, their reliance on sensitive personal and financial information also makes insurance organizations prime targets for cybersecurity attacks.
Cyber attack rate in insurance industry rises
Over the past decade, the insurance industry has undergone a very extreme digital transformation. Agencies, carriers, MGAs, and every other industry player in between are moving away from manual workflows and legacy systems in favor of more robust digital solutions for their daily operations.
Insurance organizations that prioritize technology modernization are providing a more seamless experience for employees, customers, and distribution partners, but progress comes at a price. As the insurance industry moves to more digital channels, The risk of cyber attacks increases exponentially.
As we conclude Cybersecurity Awareness Month, now is the time to provide an overview of the main cybersecurity risks insurance organizations currently face, as well as some best practices to protect your data and revenue from attacks. I thought it was.
Key cybersecurity risks in the insurance industry
data breach
When it comes to cyber-attacks, data breaches are a top concern and one of the most significant threats facing not just insurance companies, but almost every business in every industry. Big players like it too apple and verizon Have you been the victim of a data breach in the past? This is because hackers can access and expose your organization’s data in a variety of ways, including:
- malware
- insider threat
- Phishing
- ransomware
- Application vulnerabilities
- guess password
- And many more
In March 2024, Data breach occurs at Fidelity Investments Life Insurance Co. The personal data of over 28,000 customers was compromised. Cybercriminals hacked one of our third-party providers and obtained sensitive information such as names, social security numbers, bank accounts, and dates of birth for Fidelity policyholders.
Beyond financial losses, insurance organizations may face legal liability, reputational damage, and loss of customer and partner trust as a result of violations.
social engineering
You wouldn’t hand over sensitive information to someone you don’t know (we hope!), but what if you think the question came from someone you know and trust?Social engineering is a form of cybercrime. It occurs when someone manipulates an individual into divulging confidential information, often by pretending to be someone the individual trusts. What looks like an innocuous email from a colleague asking you to click on a link or download a document may actually be a sophisticated means for hackers to break into your system and compromise your data. .
Once hackers gain access to systems through social engineering, they can quickly launch other attacks such as malware distribution or data breaches, causing even greater financial and reputational damage.
theft and fraud
The move to more digital channels and touchpoints means that a significant number of financial transactions in the insurance industry will take place online. While this makes life easier and more convenient for everyone involved in insurance sales, it also puts companies at higher risk of fraud.
Cybercriminals are increasingly targeting insurance companies to commit fraud. From identity theft to more complex schemes like billing manipulation. Insurance fraud costs the industry an estimated $308 billion each year.
Protect your data and revenue by following these cybersecurity tips
No company is 100% immune to cyberattacks, but there are ways to reduce the risk. Insurers can follow these tips to ensure their data is locked down, compliant, and safe from outside threats.
Tip #1: Require multi-factor authentication across all systems
Multi-factor authentication (MFA) is quickly becoming the standard for data protection across many industries, and insurance is no exception. MFA ensures that users go through at least two different authentication points before logging into the system.
MFA typically requires users to enter standard login credentials along with a one-time passcode sent by text or email. Multiple identity verification checks make it more difficult for unauthorized individuals to gain entry, as even if the password is compromised, the second authentication step can thwart the attack.
Tip #2: Prioritize ongoing security awareness training
As the first line of defense, employees play a critical role in identifying and mitigating risks such as phishing attacks, fraud, and data breaches. By offering (or requiring) regular training sessions, you can equip your team with the knowledge and skills they need to be aware of potential threats.
By demonstrating a commitment to ongoing cybersecurity training, you can foster a culture of vigilance in your organization. And those of us in the industry know how quickly things change and new innovations emerge, so ongoing training is essential. Continuing education ensures employees are up-to-date on the latest threats and best practices, and strengthens their understanding of compliance requirements and security protocols.
Tip #3: Create an incident response plan
In the unfortunate event that your data is compromised, it’s a good idea to have a response plan in place. Rather than panicking after a cyberattack, creating a recovery plan is a proactive approach that can help minimize damage, reduce downtime, and preserve your overall reputation.
A clearly defined plan strengthens preparedness by identifying potential vulnerabilities and outlining recovery strategies. When creating your plan, be sure to define clear procedures and responsibilities for responding to various incidents. Also, don’t forget to update and test your plan regularly to ensure employees understand their roles.
Tip #4: Assess the health of third-party vendor data
The insurance industry is increasingly using third-party vendors. As more insurance companies and agencies partner with third-party providers for at least one component of their digital transformation, an organization’s data security success depends on the security and readiness of the software they partner with.
Organizations need a strong security framework to ensure that their systems and the vendors they work with are secure and compliant, and that sensitive information is protected. SOC2 is a powerful framework designed to help businesses navigate the complex landscape of data protection and regulatory compliance.
More specifically, a SOC 2 Type II audit evaluates all the controls and processes a company has in place related to data security, availability, confidentiality, and privacy. Choosing a vendor that has undergone a SOC 2 Type II audit provides the following benefits to your insurance industry business:
- Protect consumer data
- Maintaining compliance
- Build customer and partner trust
- Improving work efficiency
- reduce risk
- Gain competitive advantage
These are just some of the benefits.
Data security should never be an afterthought
Due to the growth of data and the rise in breaches, resiliency against cyber-attacks is rapidly becoming a critical requirement for insurance organizations. As cyber threats continue to evolve, prioritizing data security from the beginning ensures robust defenses are integrated across all operational processes.
The best way to avoid cyberattacks is to be diligent about constantly evaluating and updating your organization’s security standards and cyber hygiene practices, as well as those of the software vendors you work with.
If you’re a carrier, agency, or MGA/MGU looking to partner with AgentSync for more modern and seamless producer licensing and compliance management, you can breathe a sigh of relief. Our products are built on a Zero Trust architecture, and we’re happy to guide you through all the ways you can prioritize your data security. To learn more, Check out the demoor Talk to an AgentSync expert today.
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