The pandemic has accelerated digital transformation across all industries around the world. Rapid adoption of information technology has led to organizations relying heavily on digital, cloud, and remote solutions to ensure daily operations can continue.
While this has its benefits, increasing reliance on digital technology has increased the risk for cybercrime, with particular industries being more affected than others, such as the financial and insurance sector.
The type of risks haven’t changed in recent years, rather it is the frequency of cyber attacks and the significant impact on financial institutions has increased. After the health sector, the financial sector has experienced the largest number of pandemic related cyber incidents, with insurers, credit unions, and payment institutions being most affected.
Insurance companies are a prized target for cybercriminals due to the vast amount of confidential personal information data they hold. Insurance products, policies, and pricing all require data, and insurtech (insurance technology) is evolving to ensure consumers receive better value, with more flexible and personalized insurance policies, all accessible 24/7/365 through mobile apps.
All the data required to power real-time insurance services with seamless customer experience is incredibly valuable in today’s world. With the increasing reliance on new technologies to deliver better and more streamlined products and services, the amount of protected personal data being collected has also increased.
Big data is the lifeblood of the insurance industry, defined as the structured and unstructured data that is used to influence rating, pricing, underwriting, marketing, and claims processing.
Structured data is highly organized and formatted to be easily searchable in databases – think name, address, claim history. This data format is much easier to protect than unstructured data, which has no predetermined format or organization. While more difficult to use and protect, it has incredible value to insurers, influencing all areas of business such as fraud detection, customer experience, and policy writing.
This information is extracted by data analytics and machine learning from sources such as social media networks, written reports, and wearable technology. This is the data used to provide customized customer experience, fine-tune what insurance carriers will/will not cover, or even spot fraud.
Cybercriminals attempt to breach databases containing personally identifiable information through any number of ways, including:
- Botnet attacks
- Phishing attacks
- Mobile malware
- Credential stuffing
- Insider threats.
Cyber-attacks can result in both short and long term consequences that can devastate organizations. The first impact is the immediate disruption to business operations, which also has a direct impact on policyholders.
There are also the financial demands a cyber incident places on a company, whether it is the recovery and restoration of data, ransom payments to recover access to a system or network, and any legal and compliance fines that occur when personally identifiable information is stolen or compromised.
Aside from the direct financial impacts, cyber-attacks can lead to severe and ongoing operational issues, which can create substantial loss of trust and reputation in the industry. Consumers experiencing disruption with their insurance company may look elsewhere for their insurance needs. Trust is an intrinsic factor when considering an insurance carrier, consumers want to know their choice of provider will protect their sensitive personal information. Reputational damage will also negatively affect the confidence of investors, policyholders, and rating agencies. This can lead to ongoing impact on a company’s bottom line.
Technology trends emerging in the insurtech space are helping to make this data more actionable. These trends include advanced data analytics, machine learning, and the internet of things (IoT), which include smart apps and devices.
The traditional security tools and solutions used for preventing cybercrime are not sufficient for most insurance institutions today, particularly those who handle large amounts of unstructured data. Staff who undertake data analysis within a business are not likely to have the necessary knowledge to respond rapidly and effectively to potential threats that occur with different types of data.
Cybersecurity solutions for insurance technology must focus on preventing data leaks, through access controls, encryption, and network monitoring. Big data security solutions should offer real-time monitoring and analysis, with consideration to performance degradation which can lead to data processing delays. Other security solutions include:
- Penetration testing, network vulnerability testing
- Real-time detection and response
- Upgrading systems
- Consider cloud solutions for compliant and secure storage options
- Appropriate security protocols and policies
- Cybersecurity awareness training for employees to mitigate human error leading to data breaches
- Developing and implementing a disaster backup and recovery plan.
Effective cybersecurity requires expertise and knowledge to develop security strategies and implement solutions. Managed security services providers are best placed to ensure the level of cybersecurity required is in place to protect your operations and infrastructure. Speak to the leading cybersecurity specialists at PWR Technologies today for comprehensive end-to-end services and solutions.