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Featured General Insurance Security

Ensuring robust security measures is essential in today’s digital landscape, where cyberattacks are serious threats and data breaches occur frequently.

Traditional authentication methods like passwords and PINs are becoming less effective against sophisticated hacking techniques. For instance, brute-force attacks allow hackers to automate a series of letters and numbers to forcibly enter a system.With such security measures in place, hackers can easily access users’ personal files, finances, and other records, leading to potential blackmail and even bankruptcy.

However, with biometric authentication, a cutting-edge security system, there has been significant reduction of cyberthreats, and a higher level of security for sensitive information.

Understanding biometrics

Biometrics refers to the process of capturing and verifying an individual’s identity using unique behavioral or physical characteristics. Biometric scanners capture unique personal characteristics that are inherently difficult to replicate, making them a robust solution for security.

Unlike traditional authentication methods like passwords or PINs, which can be easily forgotten, stolen and even guessed, biometric identifiers are directly tied to an individual person.

Types of biometric systems

Depending on the biological information collected, biometric systems fall into several categories:

  1. Fingerprint recognition: Utilizes the unique patterns of ridges and valleys on an individual’s fingertip.
  2. Facial recognition: Analyzes facial features, such as the distance between the eyes, nose width, and jawline.
  3. Iris scanning: Examines the unique patterns in the colored part of the eye.
  4. Voice recognition: Identifies individuals based on the unique characteristics of their voice, such as pitch, tone, and speaking style.
  5. Behavioral biometrics: Includes patterns in how individuals type, walk (gait recognition), or other means by which they interact with devices.

Biometric verification in insurance

The primary advantage of biometric authentication lies in its ability to provide highly accurate and reliable identity verification, significantly reducing the risk of fraud and unauthorized access.

In the insurance industry, this is a game-changer.

According to the FBI, the total cost of insurance fraud (excluding health insurance) is estimated to exceed $40 billion per year.

In medical insurance, where personal information is more prone to being hacked, the situation is even more severe. Solving medical identity theft consumes a considerable amount of time, and only 10% of patients report satisfaction with the resolution of their cases.

The same study explains that on average, patients, hospitals, and insurers spend over 200 hours addressing these incidents.

Roles & success stories of biometric systems in insurance

Numerous insurance companies are already leveraging biometric technology with positive results.

From using voice recognition systems for customer service to facial recognition for secure access to policy information, there are many practical uses of biometric systems in insurance.

Enhancing data protection & privacy

What makes Biometric data highly secure is the fact that it is unique to each individual and difficult to forge.

This ensures that sensitive information is better protected against unauthorized access, providing peace of mind to customers and complying with stringent data protection regulations.

While it is easy to brute force one’s way through PINs and password logins, it is nearly impossible to do so on a fingerprint or iris scan login.

Prudential, for example, has integrated biometric authentication into its mobile app, allowing customers to access their accounts using facial recognition, fingerprint scanning and voice (Prudential Voice). This not only enhances security but also improves user convenience, leading to increased customer satisfaction.

Preventing fraud & identity theft

Biometric systems significantly improve identity verification in the insurance industry by providing a secure and accurate method for confirming an individual’s identity.

By adding an extra layer of security that is difficult to breach, biometric data like iris patterns or voice recognition is unique to each individual and nearly impossible to replicate. This makes it challenging for fraudsters to impersonate someone else or create fake identities.

Streamlining customer onboarding & claims processing

Traditional methods of onboarding customers and processing claims often require extensive paperwork and manual verification, which can be time-consuming.

With biometrics, insurance companies can quickly verify identities using fingerprint scans or facial recognition, reducing the time needed for onboarding new customers or processing claims.

AuthID.ai, a data analytics and fraud prevention software company, provides biometric identity solutions that companies in all industries can implement in their customer onboarding process.

Conclusion

The integration of biometric authentication into the insurance industry represents a significant advancement in security and efficiency.

As traditional methods of identity verification become increasingly vulnerable to sophisticated cyberattacks, biometrics offers a robust solution that leverages unique biological characteristics to ensure secure access and data protection.

Biometric systems in tandem with other advanced security measures like Two-factor authentication (2FA) can help establish a comprehensive framework that enhances overall service and fosters trust among all insurance stakeholders.

July 15, 2024
Featured General Insurance Security

The insurance industry sits on a mountain of personal data – health records, driving habits, financial details. It’s the fuel for innovation in Insurtech, but without responsible use and robust security, it becomes a liability. Here’s a harsh reality. An eye-watering 37% of consumers have already walked away from companies due to data privacy concerns. And 81% believe how you handle their data is a direct reflection of how much you value them as a customer.

These statistics reflect a growing distrust. Policyholders are asking: how is my data being used? Is it secure? Does the company truly value me as a customer, or just my information?

With this in mind let’s examine why transparency and trust are paramount, and how prioritizing data security can become a competitive advantage in the Insurtech landscape.

The data privacy landscape today

Consumers today are more conscious than ever before about their data privacy – 69% report feeling more worried than ever about their personal information. This heightened awareness isn’t born in a vacuum. Recent years have seen high-profile data breaches like the Facebook-Cambridge Analytica scandal, where millions of users’ data were harvested without consent, the Equifax breach that exposed the sensitive information of 147 million people, and the Marriott International incident, which compromised the personal details of approximately 500 million guests. And popular documentaries like Netflix’s The Social Dilemma have peeled back the curtain on how our data is collected, used, and sometimes misused.

The result? Around 70% of adults globally are actively taking steps to protect their online privacy. They’re deleting unused accounts, tightening privacy settings, and demanding greater transparency from the companies they interact with. This shift in consumer behavior presents a stark reality for the insurance industry: data privacy isn’t just a regulatory hurdle, it’s a bridge of trust to your policyholders.

What types of data does the insurance & Insurtech industry collect?

The insurance and Insurtech industries collect a vast amount of data to accurately assess risk, set premiums, prevent fraud, and provide better services to their customers. This data is essential for creating tailored insurance products and for the efficient functioning of the industry.

Here’s a breakdown of the data Insurtech collects, and why it matters:

  • Personal information: Name, address, date of birth – the foundation for any insurance policy.
  • Financial data: Income, assets, credit scores – used to assess risk and determine premiums. It might also include property and asset information, including things like the square footage of your home, the year your car rolled off the lot, whether you have a security system, and so on.
  • Health information: Medical history, medications, lifestyle habits – crucial for health insurance and increasingly used for personalized wellness programs.
  • Driving habits: Telematics data (think connected car sensors) can track mileage, braking patterns, and even location – used for usage-based car insurance and potentially to incentivize safer driving.
  • Digital footprint: Browsing history, social media activity (with consent) – can provide insights into overall health, risk profile, and even potential safety hazards (like posting about extreme sports).
  • Behavioral data: This can include gym memberships, loyalty program participation, or even public records of traffic violations. This broader picture helps Insurtech create a more comprehensive risk assessment.
  • Claims history: Claims history can help insurance companies understand risk profiles and forecast potential future needs.
  • Geolocation data (with consent): Real-time location tracking (e.g., through telematics), travel patterns, and geographic risk factors (e.g., flood zones) help in risk assessment, underwriting accuracy, and providing location-based services.

Regulations alone aren’t enough

Insurance companies operate within a stringent regulatory framework designed to protect consumer data. For example, the Federal Gramm-Leach-Bliley Act (GLB) mandates that financial institutions (including insurers) must fully explain their information-sharing practices to customers and offer them the option to opt out of sharing their sensitive information. Similarly, the California Consumer Privacy Act (CCPA) provides California residents with the right to know what personal data is being collected about them, if it’s being sold (and to who), and the ability to access, delete, and opt out of the sale of their personal information. Then we have the Health Insurance Portability and Accountability Act (HIPAA) which sets national standards for the protection of sensitive patient health information.

All insurance companies will be aware of these regulations and more. However, compliance alone is not enough. It’s crucial for insurers to transparently communicate their data protection practices to build consumer trust. Let’s get into how in the next section.

Building trust through transparency: How to communicate your commitment to data privacy

Today, policyholders are demanding transparency and control over their personal data, and that means insurance companies need to do more to communicate how they handle consumer data. Failing to do this can result in consumers going to your competitors.

To effectively communicate your commitment to data privacy:

  • Be clear & concise: Don’t bury your data privacy policy in legalese. Craft clear, concise language that outlines what data you collect, why it’s necessary, and how it’s used.
  • Less is more: Resist the urge to become a data hoarder. Clearly define the minimum data required for each insurance product or service. This demonstrates respect for policyholders’ privacy and reduces the risk of exposure to a breach.
  • Data retention with a reason: Develop a data retention policy with clear timelines. Explain to policyholders how long you retain specific data types and the criteria for deletion. This builds trust and demonstrates responsible data management.
  • Education is key: Don’t underestimate the power of clear communication. Utilize blog posts, explainer videos, and even infographics to educate policyholders about data privacy practices. This empowers them to make informed choices and fosters a sense of partnership.

Lastly, we have cybersecurity. Collecting data allows for more accurate policies and fuels the development of innovative products, so it’s not something insurance companies want to give up. And let’s not forget, it benefits policyholders too. However, any data collected should be protected with stringent cybersecurity measures.

Insurance and Insurtech companies should prioritize advanced threat detection systems, implement the principle of least privilege (limiting user access to only essential data), and utilize firewalls and network segmentation to prevent unauthorized access. These measures not only prevent attacks but also limit the damage if one occurs.

Final thoughts

In today’s data-driven world, ignoring data privacy is a recipe for disaster. By prioritizing clear communication, responsible data practices, and top-notch security, Insurtechs can turn privacy concerns into a competitive advantage. The choice is clear: embrace data privacy or risk losing policyholders.

July 8, 2024
Featured General Insurance Security

Now more than ever, insurance companies have become prime targets for cyber threats. Insurers handle vast amounts of sensitive data, making them attractive to cybercriminals.

Also, the increased attack surfaces from reliance on technology for efficient and seamless operations make insurers and others in their ecosystem—such as intermediaries, vendors, and policyholders—easier targets.

For insurers, having strong cybersecurity isn’t just about following the rules—it’s essential for protecting their business.

This article looks at specific cybersecurity strategies to help insurance companies protect their assets, reputation, and customer trust.

The impact of cyber risks

Cyber risks pose significant financial challenges to insurance companies, often resulting in a surge of claims related to breaches, ransomware attacks, and other cyber-related damages. This can substantially increase the financial burden on insurers due to higher claims payouts.

Additionally, insurers that cover ransomware payments may face huge financial demands. Even if they don’t cover such payments, they still incur high costs from legal battles and recovery efforts.

Cyber attacks can also disrupt operational activities, leading to lost revenue and increased costs associated with remediation and recovery.

The dynamic nature of cyber threats complicates underwriting risks for insurers. As mentioned earlier, insurers become prime targets for cyber attacks because they hold sensitive customer data. Data breaches can expose this confidential information, leading to regulatory fines and a significant loss of customer trust.

Breaches can severely impact an insurer’s reputation, making it difficult to attract and retain customers.

Cybersecurity solutions for insurers

 1. Advanced threat detection & response

Insurance companies must stay ahead of sophisticated cyber threats by employing advanced threat detection and response systems. These systems utilize artificial intelligence and machine learning to identify and mitigate potential threats in real time.

CrowdStrike 

CrowdStrike’s Falcon platform is renowned for its next-generation endpoint protection, offering real-time threat detection and response capabilities. By leveraging AI-driven analytics, CrowdStrike helps insurance companies detect threats swiftly and minimize potential damage.

 2. Data encryption & protection

Ensuring that sensitive customer data is encrypted both at rest and in transit is crucial for preventing unauthorized access and breaches. Encryption transforms data into a secure format that can only be deciphered by authorized parties.

Symantec (now part of Broadcom Inc.)

Symantec’s Data Loss Prevention (DLP) solutions provide robust encryption and data protection tools. These solutions help insurance companies safeguard sensitive information, ensuring compliance with regulatory standards and protecting against data breaches.

 3. Identity & access management (IAM)

Identity and Access Management solutions control who has access to what information within an organization. By implementing strong IAM protocols, insurance companies can ensure that only authorized personnel have access to sensitive data and systems.

Okta 

Okta’s Identity Cloud offers comprehensive IAM solutions, including single sign-on (SSO), multi-factor authentication (MFA), and lifecycle management. Okta enables insurance companies to manage user identities securely and streamline access to critical applications.

 4. Security information & event management (SIEM)

SIEM systems aggregate and analyze activity from various sources across the IT infrastructure, providing a centralized view of security events. This enables insurance companies to detect and respond to incidents more effectively.

Splunk

Splunk’s SIEM platform offers real-time monitoring, advanced analytics, and automated response capabilities. By integrating data from multiple sources, Splunk helps insurance companies gain comprehensive visibility into their security posture and respond to incidents swiftly.

 5. Cloud security

As insurance companies migrate to cloud environments, ensuring the security of cloud-based applications and data is paramount. Cloud security solutions protect against threats specific to cloud infrastructure and services.

Palo Alto Networks

Palo Alto Networks’ Prisma Cloud provides comprehensive cloud security, covering infrastructure, applications, data, and access. It helps insurance companies secure their cloud environments, ensuring compliance and protecting against cyber threats.

Bottom line

For insurance companies, investing in robust cybersecurity solutions is not just about protecting data but also about maintaining customer trust and ensuring regulatory compliance. By partnering with industry-leading cybersecurity firms like CrowdStrike, Symantec, and many others, insurance companies can fortify their defenses against an ever-evolving cyber threat landscape.

Implementing these solutions helps safeguard sensitive information, ensuring the continuity and integrity of business operations in the digital age.

May 31, 2024
Featured General Insurance Security

The Insurtech industry is revolutionizing insurance with technology, offering faster, smarter services that benefit everyone. Thanks to Insurtech companies, customers today enjoy instant claims processing, laser-fast customer service, and personalized policies. Insurers get real-time data insights that further fuel innovation. But with these advancements come new risks.

Insurtech companies are a prime target for cybercriminals. Why? Because they house vast amounts of sensitive personal and financial data. Protecting this information isn’t just a technical necessity—it’s essential for maintaining trust and integrity, both for customers and clients, but also for the industry. With this in mind, let’s explore cybersecurity risks and solutions for the Insurtech industry in 2024 and beyond.

Cybersecurity risks

Data breaches

In a data breach, unauthorized individuals (hackers) gain access to sensitive, confidential information. Data breaches are rife. For example, insurance broker Keenan & Associates suffered a major data breach in 2023, impacting 1.5M individuals. And back in January this year, life and health insurance giant Washington National Insurance Company fell victim to a SIM-swapping attack that saw over 20,000 people affected. More generally, annual data breaches in the US have increased more than threefold since 2012, while the average cost to US businesses has surged by 60%.

When it comes to data breaches, not all targets are equal, although all industries are impacted. For example, the industry that suffers the most data breaches is IT, software, and tech services. This may surprise some people because you’d expect companies in the tech sector to employ stringent cybersecurity measures. The truth is, that many companies are committed to cybersecurity, but tech companies, including Insurtech companies, are such a lucrative target that robust and quality cybersecurity measures are paramount.

It’s important to note that the term data breach specifically refers to the exposure or theft of data itself, but there are many methods through which data can be stolen, and each presents unique risks. Let’s look at some of the methods that result in a data breach.

Ransomware attacks

Ransomware attacks, where malicious software encrypts a company’s data and demands payment for its release, are one of the primary causes of data breaches. Ransomware attacks can bring a company’s operations to a standstill, leading to financial losses and data theft. For Insurtech companies, the consequences are severe: lost revenue, compromised sensitive information, and damaged client trust. Shockingly, 20% of the costs from ransomware attacks stem from the blow to a company’s reputation.

The most common entry point for ransomware attacks is phishing, which brings us to our next risk.

Phishing and insider threats

Phishing involves deceptive emails or messages that trick employees into revealing sensitive information or clicking on malicious links. For example, an employee might receive an email claiming to be from the CEO, urging them to act quickly on a fake invoice. These messages often create a sense of urgency, prompting hasty actions. Insider threats, whether intentional or accidental, pose additional risks. Employees with access to sensitive data can inadvertently or deliberately cause breaches.

Third-party vulnerabilities

Insurtech companies often rely on third-party vendors, which can introduce significant security risks. Vendors may have access to sensitive data and systems, creating potential entry points for cybercriminals. Many companies also use open-source code, which, while beneficial, can contain vulnerabilities. If hackers find these vulnerabilities, they can potentially access countless different software systems.

Threats in a tech-fueled world

One of the more pressing concerns today is how increasingly powerful software and systems are shaping the cybercrime industry. Cybercriminals are now using AI to craft scarily convincing phishing emails, making it harder to rely on traditional red flags like spelling and grammar errors.

Similarly, the rise of cybercrime-as-a-service has changed the landscape. Cybercriminals now offer ransomware software to aspiring hackers who may not be tech-savvy, for a monthly fee. This lowers the bar for entry, allowing more people to engage in cybercrime. The combination of AI-enhanced phishing and accessible cybercrime tools means companies must be more vigilant than ever in their cybersecurity efforts.

Solutions – combating cybersecurity risks in Insurtech

So, we’ve covered the risks, but how do Insurtech companies go about combating them? Let’s look.

  • Advanced encryption: Implement robust encryption methods for protecting sensitive data both at rest and in transit. Use strong encryption standards like AES-256 to ensure that intercepted data remains unreadable without the correct decryption keys.
  • Multi-Factor Authentication (MFA): Implement MFA to add an extra layer of security by requiring multiple forms of verification before accessing sensitive systems. This reduces the risk of unauthorized access, even if passwords are compromised.
  • Regular security audits and penetration testing: Conduct regular security audits and penetration testing to identify and address vulnerabilities proactively. Comprehensive assessments help find and fix security gaps, keeping the company ahead of potential threats.
  • Employee training and awareness: Regular training sessions for employees help them recognize phishing attempts and other cyber threats. Emphasize the importance of following security protocols and reporting suspicious activities to create a well-informed and vigilant workforce.
  • Incident response planning: Develop and maintain a robust incident response plan outlining steps to take immediately after a breach is detected, including containment, eradication, and recovery processes. Regularly update and test the plan to ensure the team is prepared for an effective response.
  • Stringent access control: Employ the principle of least privilege, where users only have access to the systems necessary to perform their jobs. This massively limits what data can leak during a phishing attack.
  • Cybersecurity insurance: Invest in cybersecurity insurance to mitigate the financial impact of a cyber-attack. This insurance covers costs associated with data breaches, ransomware attacks, and other incidents, providing access to specialized response teams and resources for quicker recovery.

Wrapping up

In today’s hostile cyber environment, Insurtech companies are prime targets for attacks. Robust cybersecurity isn’t optional—it’s a must. By taking deliberate measures like advanced encryption, multi-factor authentication, and regular security audits, companies can protect their systems and keep sensitive data safe from malicious actors.

 

May 29, 2024
Automation Featured General Insurance Security

Policyholders increasingly prefer digital interactions over physical ones. However, verification challenges will often lead to high onboarding dropout rates.

Companies must adopt AI-driven verification technologies and advanced digital processes to deliver seamless experiences that foster customer trust and confidence.

Today, digital identity verification solutions are revolutionizing how insurers meet customer expectations and combat fraud.

AI-driven verification solutions

Enhancing identity verification processes is crucial for managing customer identities securely and efficiently in an era of rampant fraud.

This entails adopting AI verification technologies and advanced digital processes like digital onboarding, biometric signatures, and biometrics to deliver faster, smoother experiences, thereby building customer trust and confidence.

These solutions, powered by advanced technologies like biometrics, artificial intelligence (AI), machine learning, and blockchain, are revolutionizing how insurers verify policyholder identities, streamline underwriting processes, and combat fraud.

Let’s delve into the significance of digital identity verification solutions in insurance and how they are reshaping the industry landscape.

 1. Streamlining customer onboarding & verification processes

According to a report by Statista, 44% of Americans aged 18 to 29 who have some form of insurance purchased their policies online.

Traditionally, the insurance application process involved cumbersome paperwork, manual document verification, and lengthy approval times.

However, with digital identity verification solutions, insurers can streamline customer onboarding and verification processes, thereby enabling faster policy issuance and enhancing the overall customer experience.

Through secure online platforms and mobile applications, policyholders can now verify their identity digitally using biometric authentication like Face ID and fingerprint scanning. This not only eliminates the need for paper-based documentation but also ensures greater security and trust in the insurance transaction.

 2. Enhancing risk assessment & underwriting accuracy

Digital identity verification solutions play a crucial role in enhancing risk assessment and underwriting accuracy for insurers.

By leveraging AI algorithms and machine learning models, insurers can analyze vast amounts of data collected from policyholders, including biometric information, behavioral patterns, and transaction history.

This data-driven approach allows insurers to gain deeper insights into customer profiles, assess risk more accurately, and tailor insurance products to individual needs.

 3. Improving compliance with regulatory requirements

Digital identity verification solutions help insurers adhere to regulatory requirements like General Data Protection Regulation (GDPR), anti-money laundering (AML) and Know Your Customer (KYC) guidelines by ensuring the secure collection, storage, and transmission of sensitive customer information.

Through encrypted communication channels and blockchain technology, insurers can safeguard customer data from unauthorized access and cyber threats, thereby maintaining regulatory compliance and protecting customer privacy.

 4. Combatting fraud & enhancing security

Digital identity verification solutions offer a hypoactive approach to combating fraud by detecting suspicious activities and verifying the authenticity of customer identities in real-time.

By employing advanced biometric authentication methods and behavioral analysis techniques, insurers can detect fraudulent claims, identity theft, and unauthorized transactions with greater accuracy and efficiency.

This not only helps insurers minimize financial losses but also protects honest policyholders from the adverse effects of fraudulent activities, thereby preserving trust and integrity in the insurance ecosystem.

Successful implementations in the U.S.

Lemonade

Lemonade uses advanced digital identity verification to streamline the customer onboarding process. Their AI-driven platform verifies user identities quickly and securely, reducing the risk of fraud and enhancing the customer experience.

Root Insurance

Root Insurance leverages digital identity verification to ensure accurate and secure policy issuance. By integrating identity verification technology, Root can offer a seamless and efficient onboarding process for new customers.

NEXT Insurance

NEXT Insurance utilizes AI-driven digital identity verification to ensure the secure and efficient onboarding of new customers. This technology helps NEXT Insurance verify identities in real-time, reducing the risk of fraud and providing a seamless user experience for small business owners seeking insurance coverage.

To conclude

Digital identity verification solutions are transforming the insurance industry by driving efficiency, enhancing security, and improving the overall customer experience. By embracing these innovative technologies, insurers can streamline operations, mitigate risks, and stay ahead in an increasingly competitive market.

As digitalization continues to reshape the insurance landscape, the adoption of digital identity verification solutions will play a pivotal role in shaping the future of insurance and ensuring its sustainability in the digital era.

May 22, 2024
Featured General Insurance Security

The foundation of modern digital services is APIs. Global insurance corporations are creating, implementing, and adjusting APIs at a rate that has never been seen before. These organizations share critical data with partners, consumers, and workers using APIs, which serve as the cornerstone for their online services and transformational applications.

It is not without difficulties, though, as is the case with everything that grows quickly. The proliferation of APIs creates a larger attack surface for malevolent actors, hence opening the door to a myriad of new security concerns. These criminals are persistent and constantly looking for novel and surprising ways to target companies. Organizations used to think that requiring adequate authentication to use an API would be sufficient to discourage attackers and send them elsewhere. However, data from Salt Labs indicates that 84% of attacks were from users who appeared to be legitimate but were in fact attackers who either obtained credentials maliciously or by taking use of already-existing procedures to establish their own acceptable credentials for accessing the API.

The insurance industry, along with the financial services and retail industries, is the most vulnerable, even though the API ecosystem has expanded quickly across all industries worldwide. This article will examine the rise in API attacks in the insurance sector and reiterate the ongoing work that the security and software sectors need to do in this area because malicious actors are always working hard to exploit the present security flaws.

The days of setting up policies by calling insurance brokers are long gone; times have changed. Customers today have different demands and anticipate being able to purchase, set up, renew, and file a claim for their insurance online in one convenient location. The insurance sector, like the financial services sector, depends significantly on APIs to deliver services and drive corporate innovation. The industry has advanced into the current era with the usage of APIs and microservice-based architectures, yet there are still difficulties.

Insurance companies need to meet customer demands by processing and sharing sensitive customer data with numerous third parties, all the while making sure that customers can instantly access, amend, and submit their information via websites and mobile applications. APIs are now crucial to the insurance industry due to this new environment, which also presents new security risks and makes them more noticeable to would-be attackers. In fact, 92% of respondents to Salt Security’s State of API Security for Financial Services and Insurance survey said they had at least one serious security issue involving their production APIs in the previous year—a startling statistic. In addition, the number of insurance companies using cutting edge, AI-driven, API-driven automation technologies to assist the underwriting process, handle client claims, and deliver services has increased significantly because of Covid. As per McKinsey & Company, artificial intelligence has the potential to drastically alter the insurance sector by 2030. Leaders in the insurance industry must now quickly and effectively update, replace, or supplement their current security defenses in order to confront the compounded growing security risks.

Findings from Salt Security’s State of API Security for Financial Services and Insurance show that malicious actors are busily at work, increasingly focusing on insurance APIs. In fact, between the first and second half of last year, there was a tremendous 244% rise in unique attackers. Furthermore, a startling 27% of participants disclosed that they had lately encountered a privacy event or the release of sensitive data, and 17% had encountered a security breach originating from an API.

Insurance companies are transforming at an incredible rate to become more innovative and competitive by adopting API-first architectures and workflows. Although this benefits the sector, it also gives hackers a larger attack surface to work with, which makes it generally easier to infiltrate. Due to the increased attack surface, threat actors are now able to steal account information, compromise insurance claims, carry out fraudulent transactions, and eventually cause service disruptions. Moreover, insurers have the same regulatory and compliance requirements as financial services firms. They risk losing their clients’ trust in addition to facing large fines and harm to their brand from an API assault.

Securing APIs to safeguard digital services has become a corporate concern due to the increase in assaults and the expenses (fines, lost client trust, and reputational harm) involved with API security breaches. In its march toward digital innovation, the insurance industry has reached a pivotal point, and APIs are essential to the development of new insurance services. The time has come for business leaders to think about and put into practice tried-and-true strategies for reducing API risk, utilizing specialized AI-based security defenses for APIs. This will enable insurers to safely harness the power of APIs and maintain their competitiveness in this quickly evolving market while guaranteeing customer loyalty, compliance, and overall performance.

December 7, 2023
Cloud Computing Featured General Security

According to At-Bay, Inc., more than one in four (31%) firms reported being unable to retrieve their data following a ransomware attack, even though 92% of organizations had backed up their data, whether it was on-site, offsite, or in the cloud.

In comparison to companies who successfully restore data, the average claims cost for corporations that fail to do so is $190,000.

The insurance company and surplus lines broker claim that a successful recovery of data after a ransomware attack can save a cyber incident’s total cost by up to 41 percent. Businesses that recover their data successfully are three times less likely to comply with a ransom demand.

Not many security professionals find data backups and the numerous solutions on the market particularly exciting. It’s important to note, though, that some backup plans may end up being far more successful than others. Making the correct decision can decrease the risk that a company will have to pay a ransom by up to three times.

After reviewing its claims data, At-Bay concluded that the cloud backup architecture provided the best chance for effective data restoration. Eighty percent of businesses that used cloud backups recovered.

The remarkable success rate of cloud technology

With an 80% effective recovery rate, cloud backup architecture outperforms offshore backup by a factor of 1.5. Moreover, ransomware was paid 2.5 times more frequently by those using offsite backups than by those using cloud backups.

Optimal approaches to develop an effective data backup strategy

The four suggestions that follow can improve any backup plan and help a company recover from a cyberattack.

1. Understand the interconnectedness of systems

It is not sufficient to just copy data elements and store them in one or two repositories; instead, it is essential to catalog and classify the ways in which the system functions. Data that has been carelessly dumped can cause the restoration process to lag while IT personnel try to figure out which apps use the data.

2. Implement robust password security measures

Organizations must take extra precautions to secure passwords and other login credentials for backup accounts since hackers may target these accounts. In order to achieve this, it is advised to create a different Active Directory account with a stronger password.

3. Acquire the required bandwidth

A quick internet connection is essential while recovering from the cloud. The repair process of a business might be severely hampered by slow speeds. It is crucial to keep in mind that data can only go so fast over Ethernet, and moving terabytes of data can take days or even weeks.

4. Consistently verify the integrity of backups

Verify the backup’s functionality and file completeness by running restoration tests.

November 10, 2023
Featured General Insurance Security

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.

May 17, 2023
Automation Business Featured General Insurance Security

As technology continues to progress, insurance companies are faced with an ever-growing risk of malicious attacks that could jeopardize the data they retain on their policyholders. It is anticipated this threat will only increase in frequency and intensity over the coming years.

In today’s digital age, the chances of facing a cybersecurity attack are increasingly high. Data shows that the United States faced 46% of the world’s cyberattacks in 2020 alone – a worrying figure more than twice higher than any other nation. It is no longer “if” an organization will be targeted by hackers; it’s when they can expect to encounter such a threat.

As the risk of digital breaches increases every year, companies in high-risk fields must take a proactive approach to security. It isn’t about being more prepared than competitors – it’s about evaluating your resources and determining which ones are worth protecting from attack. This will help you determine your level of susceptibility and what preparation steps need to be taken.

Predicted to become more frequent and intense in the future, cyber-criminals are increasingly targeting insurance companies for their vast caches of personal information. The massive amounts of Personally Identifiable Information (PII) stored by insurers are highly sought-after resources on the dark web, with millions of Americans already affected. To protect their policyholders from nefarious actors, it’s essential that these organizations continually invest in cutting-edge security protocols and practices.

With the cyber threat landscape constantly evolving, 68% of business leaders feel like their cybersecurity risks are rising. As a leader in an insurance firm, it is time to take action and guarantee that you are fully prepared for any impending threats. Here’s how: maximize your team’s efficiency and response times by taking preventative steps to limit all potential risks posed by cybercriminals.

1. Prepare Your Employees with the Essential Skills to Reduce Risk

It is critical to consider all potential vulnerabilities when analyzing security risks. A study revealed that 95% of cyber-attacks are caused by human error, which can happen at any access point during online activity. Therefore, teaching employees the appropriate digital safety techniques should be a top priority to prevent misfortune.

Here are some tips and tricks for keeping your data secure:

  • Instill the Responsibility of Device Care — Recent data from Forrester revealed that 15% of corporate intrusions are caused by lost or stolen devices. With remote work on the rise, it is crucial to be proactive and take precautions; any device–personal or professional– can become a gateway into your network. To stay safe, IT teams should consider investing in a device management solution that allows them to manage employee devices remotely and minimize risk exposure. However, this must only serve as an additional security measure—it shouldn’t replace existing solutions.
  • Educate Staff to Identify Suspicious Behavior — To maximize the safety of their devices, employees must be trained to recognize any possible signs of suspicious activity. This could include new apps and programs suddenly appearing on their device; a slow-down in performance for no clear reason; added browser extensions or tabs that weren’t there before; as well as loss in mouse/keyboard control. Thus, it is essential for all personnel using company equipment to stay alert and mindful of such occurrences.
  • Safeguard Confidentiality at All Times — Make sure to properly communicate the importance of secure processes such as virtual private networks (VPNs), multi-factor authentication, and frequent password changes to all staff. Showcase tangible examples of data breach consequences in order for employees to comprehend that threats can arise anytime, anywhere – placing them and their confidential information at risk too. This will emphasize how imperative careful security management is for everyone.
  • Make the Most of Training and Online Courses — To ensure your organization’s safety, frequent “security check-ins” and comprehensive virtual training courses are available from the Federal Trade Commission, Department of Homeland Security, and other reputable sources. These invaluable tools will equip you with everything you need to protect your business from harm.

2. Unlock the power of Artificial Intelligence (AI) and Machine Learning (ML)

As insurance companies become increasingly digitized, the employment of artificial intelligence and machine learning techniques can help mitigate risk. Data aggregation is a powerful tool for combating malware, ransomware, as well as advanced persistent threats (APT). AI & ML allow for exponentially faster data analysis to detect anomalies within datasets. Implementing these technologies further enables continuous monitoring of workflows and rapid response should an attack occur.

When searching for a cybersecurity solution to secure your firm’s data, you must be sure that it follows certain measures. Make access control management, examining data behavior, encryption of large volumes of information, and prevention from potential leaks top priorities in order to ensure the safety of your insurance business.

3. Design a Detailed Action Plan

Having a well-defined plan and protocol can bring peace of mind to all stakeholders – insurance leaders, investors, and customers. This strategy should encompass all possible safety protocols as well as emergency actions. Here are some suggestions for best practices:

  • Data Privacy Rules and Regulations: Designed to deliver a comprehensive overview of corporate data processing and guarantee the utmost safety, this guide will ensure your company’s security.
  • Retention Policy: This document outlines the specific requirements for where and how long corporate data must be retained, providing a comprehensive overview of storage and archival processes.
  • Data Protection Policy: Uncovering the way an organization manages the private data of its employees, customers, vendors, and other external stakeholders is essential.
  • Unfortunate Occurrence Reaction Plan: To guarantee a swift, competent, and systematic answer to security issues including ransomware strikes and breaches, appropriate responsibilities and processes must be followed.

Despite the possibility of a cyber threat appearing to be remote, it is essential for insurance firms to optimize their preparedness and security in order to protect against potential attacks. In recent years, countless businesses regardless of size have fallen victim to cyberattacks – an unfortunate trend that continues today. If your company relies on digital systems or employees engage with the online ecosystem, chances are high that you may experience either attempted or successful intrusion attempts.

Can your organization risk an unexpected disaster? If the answer is a resounding no, it’s time to act! Protect what matters most – resources, personnel, and especially customers. Put your plan into motion now so you can be sure of security in any situation.

February 23, 2023
Featured General Insurance Security

Insurance organizations contain a plethora of sensitive and confidential data. As they evolve their technology and work more closely with others, how can they protect this delicate information?

As the insurance industry stores immense amounts of confidential, personal, and financial details on its policyholders, it’s not difficult to comprehend why they are such a desirable goal for fraudsters.

Recent data from IBM’s Threat Intelligence Index reveals a concerning statistic: finance and insurance are the second most targeted industries for cyber attackers at 22.4% of all known attacks, surpassed only by manufacturing due to vulnerable global supply chains. This is the first time in over five years that finance and insurance have not topped this list, showing just how serious the continuing threat remains to insurers and insurtechs alike.

In a recent interview with InsurTech Magazine, Alan Calder, CEO of GRC International Group–a provider of IT governance, risk management, and compliance solutions–shared that, “Cybercriminals are pros at accessing, exfiltrating, and monetizing personal databases. They’re good at extorting organizations, are being pushed into increasing digitization and automation and, unless cyber security and privacy issues are considered in detail as part of project planning, organizations tend to leave large holes in what should be secure systems. Cybercriminals find and exploit these gaps. As well as these technical vulnerabilities, cybercriminals regularly ‘social engineer’ staff into providing access to systems and data.

“This all means that insurers have to build privacy by design into their systems, and they have to train and keep their staff continuously aware of the ever-changing social engineering attacks that are being focused on them.”

Insurers must be aware of the potential threats posed by mishandling confidential information.

The insurance industry is continually adopting new technology and needs to be vigilant about potential weaknesses. If a fresh platform leaves an insurer exposed to fraudsters, it’s not beneficial – it’s more of a liability. Plus, due to the ever-increasing number of alliances, purchases, and integrations within this sector, insurers must carefully weigh the extent of risk that comes with each choice they make.

“One of the biggest concerns in the insurance sector when it comes to using data is how widespread party sales functions are,” says Caroline Carruthers, the UK’s first ever Chief Data Officer at Network Rail and a highly acclaimed independent data consultant, offers her expertise to both public and private organizations when it comes to managing their data.

“Agents who sell insurance often use third-party data, and they don’t always have a robust process for how data is transferred to each organization. That in itself is a foundation-level issue because if you can’t rely on consistent, quality data coming to you, and you can’t rely on consistent governance and security of that data, you’re approaching data transformation with your hands and feet tied.

“Any transfer of data between two different systems has an element of risk. Thankfully, most insurance companies have moved on from manual data entry, which poses the highest risk, but not enough companies have standardized how they transfer and store data across third parties. If you’ve paid for a lot of data from external sources, you need to be able to use it to drive value instead of being hampered by poor processes.”

Do customers remain confident in sharing their personal information with insurers?

Consumers have proven that they are willing to share their data with insurers, particularly if there is an incentive involved. However, most consumers (80%) remain apprehensive about how their personal details are being used online; a statistic made evident by e-commerce company Motive.co. The consequences associated with these exchanges can be consequential and so it’s no wonder that individuals would like more control over the use of their data in this digital age.

Although there is an upside to this issue: research conducted by McKinsey with 1,000 North American consumers demonstrated that financial services ranked first among sectors in terms of the security and trustworthiness of personal data. It’s essential to establish strong systems and prevent breaches; however, how you engage with customers can be fundamental for gaining public approval – not just as a way of shielding your business from cyber-attacks but also for being viewed as doing the proper thing.

LenderDock keeps sensitive data secure

When it comes to the security of your data, LenderDock is dedicated to maintaining a high level of protection. As a SOC2-certified company, we are far exceeding industry standards for safeguarding customer information and providing an extra layer of assurance that your data is secure with us.

January 10, 2023
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