It’s crucial for insurers and their partners to stay
vigilant against constantly evolving cyber threats and collaborate to reduce
cybersecurity risks in the ecosystem.
The insurance industry relies heavily on digital ecosystems
involving multiple stakeholders. A survey found that 84% of insurance
executives view these ecosystems as a vital part of their business strategy. By
2025, it is predicted that these ecosystems will generate around 30% of the
world’s insurance revenue, according to McKinsey.
Ecosystems present Insurers with growth opportunities, but
these opportunities also come with complex and challenging cybersecurity risks.
According to Gartner, the insurance industry’s digital
ecosystems are at a greater risk of cyberattacks as the global number of active
IoT devices reaches 123 billion. Enterprise web applications are expected to
experience a surge in data breaches caused by API attacks, making it the most
common form of attack vector by the end of 2022.
In a digital environment, there are several common
cybersecurity issues that can occur, including:
- A lack of control and visibility makes it challenging to manage and monitor assets and application components in the cloud.
- The use of microservices in digital ecosystems has the potential to improve access for users both within and outside the organization.
- In microservices architectures, the data is frequently moved, modified, and accessed. This means data breaches can happen even if the communication channel is not exposed, and hackers can exploit weaknesses.
How insurers can protect their digital systems:
Collaborative approach required: Ecosystem partners need to revamp security measures and foster teamwork
Insurance companies must collaborate with their partners,
third-party vendors, and even their competitors to combat cybercriminals, who
often work together for success. To enhance their resilience, businesses need
to review their security strategy to protect themselves, their network, and
their partners.
To ensure open-source security, software developers and
security teams must voluntarily collaborate. They should keep track of any
cybersecurity incidents and dangers they come across and share that information
transparently with each other. This includes the knowledge they gain, allowing
them to identify and tackle threats effectively.
Insurers and vendors can improve their security by sharing their tools through open-source software. This allows them to receive feedback and offer their own protection to others while working together to establish a unified defense for their networks.
Embrace early detection: A wise investment
In an open-source digital ecosystem, it’s important to
detect cybersecurity breaches early on. These attacks can cause a considerable
amount of damage if they go unnoticed for weeks. It’s crucial to respond
quickly and efficiently to identify the source of the breach, the affected
systems, and the extent of the damage. Doing so will help neutralize the threat
before it can cause any severe harm.
SIEM software helps companies proactively detect and
mitigate security threats on their network to prevent disruptions to business
operations.
By collecting and analyzing data as soon as it is captured
from applications, cloud environments, and networks, security, and IT teams can
automatically manage event logs and network flow data in a single location.
Implementing zero-trust security: Treating everyone as a potential threat
Zero-trust architecture is a security approach that assumes
that every connection and endpoint could pose a threat to an organization’s
assets, data, applications, and services. This means that both internal and
external sources are considered potential threats, and all connections are
secured, even those already established within the organization.
Currently, approximately 60% of organizations in North
America are working on zero-trust projects. Meanwhile, around 50% of companies
in the insurance and finance industries have identified zero-trust security
models as a high-priority area for their businesses.
Furthermore, the security model evaluates whether the
connection complies with the security policies and protocols of the
organization. By enforcing access restrictions, users are limited to accessing
only the necessary information and are unable to access any additional data.
Implementing and maintaining a zero-trust security approach
may be difficult for insurance companies that still rely on outdated
technology. This method demands continual real-time authentication and
verification to regulate user access. However, antiquated software may lack the
necessary authentication, validation, and monitoring capabilities, which can
impede the rollout of this security strategy.
Enhance security with robust authentication protocols
It is recommended that insurance companies utilize
technology such as Privileged Access Management (PAM) SaaS to establish a
zero-trust security approach. This can help reduce the number of entry points
for cyber attackers and minimize the extent of damage caused by both internal
and external attacks.
To access the system, users with special permissions need to
have their credentials checked and are limited in what they can do. The
security tools of the system utilize automation and user-friendly options to
establish programs for privileged entry and a security framework based on zero
trust.
Data segmentation
To protect customer and company information and resources,
it is crucial to segment data. This means limiting access to data and allowing
users to access it only when necessary and appropriate.
Studying how people use network servers can make it easier
to see what’s happening and improve security in a digital environment.
One way to protect resources is by using distributed
resource protection mechanisms (DRPM). This verifies client or partner profiles
and only grants capability tokens to those who meet the criteria.
To control a user’s access to resources, it is crucial to
implement time limits and issue tokens that expire quickly. As the user becomes
more reliable, the validity of their token can be expanded over time by the
provider of the resources.
Regularly conduct stress tests
A stress test is a method used to evaluate the ability of
your application, system, or software to withstand extreme conditions. The
objective is to detect any weaknesses, enabling you to reinforce security measures
before cyber attackers make attempts to exploit them and break into your
organization’s or partner’s network.
IBM’s study found that organizations that have incident
response teams and tested response plans experience data breaches that cost
$2.46 million less than those without such measures in place.
Insurers have various methods to conduct stress tests.
To identify vulnerabilities in their computer systems and
networks, some companies opt to hire external investigators. First American
Bank, for example, spends about $10,000 annually on these investigations to
infiltrate their network systems.
To effectively test security measures and evaluate your
team’s response to a major cyber threat, simulating a real-world scenario is
the best approach.
Ecosystem partner evaluation: A comprehensive approach
Accenture’s report shows that while 97% of insurance
companies believe they have the necessary qualities to be a desirable ecosystem
partner, only 26% of those insurers feel that their ecosystem partners are
equally committed to enhancing their security resilience.
Insurance companies need to perform a security assessment or
audit before adding new partners to their systems.
Insurance companies are depending on third-party vendors
such as cloud service providers and software-as-a-service to grow their digital
operations. To safeguard their data, it is crucial for them to select vendors
who possess strong data handling strategies and excellent cybersecurity
credentials.
Find Service Organization Control 2 (SOC 2) certification
The SOC 2 certification is a report that confirms that
service providers adhere to specific standards for managing customer data. It
involves an auditing process created by the American Institute of CPAs (AICPA)
and is widely used in the industry to evaluate internal controls.
To obtain SOC 2 certification, a vendor must undergo a
rigorous audit that verifies their compliance with IT security standards. The
audit assesses the efficiency of their data security policies and systems, processing
accuracy, confidentiality, and protection of customer information.
LenderDock itself is SOC 2 certified and has put in place
monitoring of the health of these systems by automating most areas and has a
dedicated team that oversees the performance.
In other words, your data is secure, and your process is
simplified using LenderDock’s services.
Take immediate action!
Although there is a risk involved in providing vendors with
access to customer data, transaction information, and digital assets, the
benefits of these systems guarantee their continued use.
It’s important for insurers and their partners to stay
updated on the most recent cyber threats and work together to decrease the
risks of cybersecurity in the system. Taking prompt action is crucial.
