Cybersecurity in the Age of Digital Insurance

May 9, 2024 | Blogs

As a business owner in the insurance industry, one of the major goals is to operate your business securely and confidently. But with the rise of cybercrime in the industry, the challenges to reach these goals are becoming harder to achieve.

The insurance industry is a prime target for cyber criminals due to the scope of financial transactions and the substantial rewards for successful breaches. The industry has vast transactions and data pools requiring heightened vigilance and robust security strategies.

According to Security.org, businesses are increasingly at risk for a cyber-attack, with 28% of data breaches targeting smaller firms. The average global cost of a data breach has risen to $4.45 million, underlining the severe financial impact of these incidents.

Over the years, the strategies to combat these challenges have evolved tremendously.

The Evolution of Cyber Threats

Cybersecurity is a dynamic field; as defenses improve, so do the methods of cyber attackers. This constant evolution requires that security measures are proactive rather than merely reactive. Traditional passive defenses are no longer sufficient. For instance, ransomware attacks, one of the most devastating forms of cyber threats, typically occur when an internal party inadvertently exposes their credentials. While tools like two-factor authentication (2FA) and strong password policies are essential, they must be part of a broader, more integrated approach to security, including staff training.

Training and Vigilance: The Keys to Cyber Resilience

Mid-sized brokerages and insurers often lack the extensive resources of larger ones. Thus, the challenges of cyber security are even greater. Smaller brokerages must focus intensely on training their teams not only to recognize threats but also to simulate and respond to real-world attack scenarios. “This approach is like a sports team practicing plays; it’s about preparing for the exact situations they will face. Trufla is doing just that —leading the way by testing and reporting on specific vulnerabilities, turning theoretical knowledge into practical defense strategies,” says Dave Duncan, Trufla’s CIO.

The Importance of a Human Firewall

Despite the best technical safeguards, the human factor remains a critical vulnerability. This is why developing a human firewall is crucial. Employees must not only be trained in cyber security protocols but must also embody the frontline defense against cyber intrusions. Knowing how to react when something goes awry is as important as preventing breaches in the first place.

Staff training is only part of an overall cyber security protocol that brokerages and insurers can adopt to stay ahead of the onslaught of potential threats looming around every corner.

4 Reasons to Adopt Cyber Security Protocol

There are many reasons to implement a cyber security protocol at your brokerage. Below we cover the most common reasons why adopting a cyber security plan is critical for your business.

Reputation Damage: A single security breach can damage a company’s reputation, which is often the most immediate and long-term negative effect on an organization. The lack of trust after a damaged reputation also contributes to financial loss and can have a negative impact on stakeholders.
Financial Loss: Financial loss from a cybersecurity breach can have immediate and potential long-term effects on a company. These losses typically arise from the theft of financial information, costs incurred in addressing the breach, and disruptions to business operations.
Legal Liability: Class action suits and other liability scenarios can impact all areas of a brokerage or insurer during and after a cybercrime event.
Operational Disruption: When your brokerage or insurer experiences a security breach or other cybercrime, this inevitably will disrupt the day-to-day operations of their organization and eventually puts a financial strain on it, potentially for years to come.

Despite adopting a well-thought-out cyber security plan, there are additional areas to keep in mind when it comes to implementation.

The Broader Security Landscape

While larger firms often have the luxury of dedicated security teams, many organizations rely on a patchwork of contractors and disparate tools, leading to potential gaps in their security frameworks. The cybercriminals often target these weaker links, opting for the path of least resistance. Thus, regular updates, consistent policy enforcement, and comprehensive security audits become indispensable for both brokerages and insurers.

AI and Cyber Crime

Cybercriminals are starting to use AI and other tools to trick brokerages, insurers, and their employees into following through on security threats which can lead to infiltrating critical business operations.

There are many ways cybercriminals can gain access to your organization and steal precious data which can be detrimental to your organization. Examples include phishing, email personalization, and perfecting communication to impersonate internal employees using grammar and voice tone software.

AI can be used to get super detailed information about posts online, corporate websites, social media, and more to aid cyber criminals to use personal information in their phishing to obtain entry into a company. Having this level of detail allows the cyber attackers to use information that feels more relevant and real so that the person exposes critical internal information, or to engage so that they end up exposing more than they should be. More complex, frequent use of emails is leading to an increase in cyber-attacks. AI is also increasingly used on the coding side of things to programmatically build out email programs and scripts to try to breach systems. Cybercriminals use AI to go through iterations to try different types of vulnerabilities.

The Critical Role of Cyber Security Partnerships

Given the complexity and rapid development of cyber threats, partnering with cybersecurity experts can provide an essential advantage. These partnerships help organizations stay abreast of the latest threats and the most effective countermeasures, reducing the risk of being caught unprepared.

As an organization in the insurance industry, it’s essential to work with a partner in the cyber security field to stay on top of the changes that are happening, so you’re not exposed to cyber activity.

Securing Tomorrow: Cyber Defense in the Insurance Sector

As the landscape of cyber threats continues to evolve, so must our approaches to cybersecurity. The integration of robust technological defenses with a well-trained human firewall creates a formidable barrier against cybercriminals. For the insurance industry, where the stakes are incredibly high, it’s not just about protecting data—it’s about safeguarding their future.