The vital role of cyber security in life insurance

The continued shift to digitized, data-driven life insurance processes has improved outcomes for policyholders. Collaboration with software vendors has also accelerated insurers’ innovative advances in the Life and Annuity (L&A) space.

However, this digital transition has also made insurance firms more attractive targets for cybercrime.

In many cases, insurance companies don’t discover they’ve been the target of an attack until it’s too late. Less than a week after last year’s infamous one MOVEit hackclose 7 million patients at Delta Dental, the largest US insurer, had their financial information compromised.

In February, Fidelity Investment Life Insurance Co. discovered a third-party data breach that compromised the personal and financial information of 28,000 customers three months after it occurred. A data breach that exposed the data of 1.5 million Keenan & Associates clients, most of them in the fields of education, healthcare and the public sector, was not discovered until five months later.

The list goes on.

Hackers are profiting from the troves of data that life insurers collect to improve their business models and customer service. Without comprehensive cyber security, compliance, business continuity and policyholder confidence are all on the line.

What’s at stake

Policyholders entrust such personal data to life insurance companies – name, address, date of birth, social security, banking information and medical history. Therefore, maintaining confidence is vital for the life insurance sector.

A single data breach – even a small one – could be enough to alarm customers and tarnish an insurer’s reputation. To minimize this potential outcome, insurers can educate policyholders about their cybersecurity measures and in turn strengthen their relationship from a brand perspective. After all, it is policyholders who pay insurers a premium to protect them and their families from unexpected circumstances.

That’s why it’s so critical that life insurers take a holistic approach to cyber security and build strong protection mechanisms into every aspect of their operations. The information they store on behalf of their customers is exactly the data that cybercriminals can use to target them with fraud — crimes that drain life insurance consumers. over $74 billion a year.

Encryption, multi-factor authentication, and real-time monitoring are just some of the measures software vendors can use to prevent such fraudulent activity. Such solutions also help life insurers stay compliant with regulations such as GDPR in Europe and HIPAA in the United States, which require organizations handling sensitive personal information to adhere to strict data protection standards. Failure to do so adequately can result in severe penalties and reputational damage.

Business as usual

In addition to protecting sensitive data, preserving trust and preventing fraud, effective cybersecurity strengthens the resilience of business operations.

Life insurance companies rely heavily on their digital infrastructure to manage policies, process claims and communicate with policyholders. Cyber ​​attacks that can damage these operations often lead to website and service disruptions. Although these are sometimes intentionally initiated by insurance companies following a suspected breach to prevent a data breach from spreading further, such outages mean that policyholders are, at least temporarily, unable to file claims , pay bills online or access other digital services. Life insurers that include incident response plans and disaster recovery protocols in their cybersecurity postures can quickly recover from these events and ensure their operations continue with minimal disruption.

Using multiple layers of cyber security is also valuable for life insurers that invest heavily in intellectual property – either in collaboration with software vendors or developed on their own. Robust cybersecurity measures, including advanced access controls and real-time monitoring, protect proprietary information from theft and unauthorized access.

Cyber ​​security – a must

Comprehensive cybersecurity requires multiple practices and tools to protect insurance operations and sensitive policyholder data from evolving cyber threats such as phishing, ransomware and cyber espionage. Cyber ​​security is a strategic imperative, fundamental to the operational integrity and growth of the life insurance industry. Without it, life insurers risk falling victim to such debilitating cyber attacks. Life insurers can only maintain the trust of policyholders if holistic cyber security solutions are put in place to protect against the very vulnerabilities ushered in by the digital age.