Cyber attacks are growing at an alarming pace across industries, with the insurance sector being no exception. In fact, insurance has become an increasingly attractive target for cybercriminals looking to monetize stolen data and disrupt critical systems. The frequency of cyber attacks against insurers has risen dramatically in recent years, with some estimates showing attacks have tripled or even quadrupled from previous levels.
Hackers are also employing more sophisticated techniques to breach insurer defenses. Phishing, malware, and ransomware campaigns have become more cunning and harder to detect. Attackers are taking advantage of vulnerabilities in outdated legacy systems that many insurers still rely on. They are also exploiting the proliferation of digital channels and reliance on cloud infrastructure to find new ways in.
The motives behind attacks are also evolving. While some are looking for sensitive customer data to sell on the dark web, others aim to extort insurers through ransomware attacks that encrypt systems and halt operations.
Insurers hold highly sensitive data, from Social Security and credit card numbers to health records and claims histories. This makes them an appealing target, especially as cybercriminals become more organized and ruthless in pursuing big scores. As cyber risks grow exponentially, insurers find themselves on the frontlines of the battle.
The insurance industry faces stringent data protection regulations that carry heavy penalties for non-compliance. Key regulations include:
With rising penalties across regulatory regimes, insurers are highly motivated to avoid data breaches and privacy violations. But as cyber threats grow more advanced, many find compliance an uphill battle.
Several major health insurance companies have suffered data breaches exposing millions of customers’ personal information. These incidents highlight the vulnerabilities in the insurance industry’s cyber defenses.
One of the largest healthcare data breaches occurred at Anthem in 2015. Hackers accessed a database containing nearly 80 million records with names, birthdates, social security numbers, addresses, and employment details. The attackers installed malware and remained undetected for weeks. The Department of Health and Human Services fined Anthem $16 million for HIPAA violations due to inadequate risk analysis and failure to implement safeguards.
As cybercriminals grow more sophisticated, insurance companies must prioritize data security and risk mitigation. Proactive planning and investment in IT security could prevent massive breaches and save insurance providers from legal consequences and reputational damage.
To bolster cyber defenses, insurance companies should implement security best practices tailored to their industry’s regulatory obligations and risk profile.
Key steps insurers can take include:
With cyber risks growing daily, insurers must make cybersecurity a top strategic priority. Following security best practices tailored to the insurance sector provides the strongest defense against attacks.
Insurance companies that fail to take cybersecurity seriously face tremendous risks beyond just the direct costs of a data breach. Legal liabilities, damage to brand reputation, and loss of customer trust can have long-lasting impacts.
Financial losses from cyber attacks are often substantial, but the non-financial consequences may be even more devastating over time.
According to a study by IBM and the Ponemon Institute, the average cost of a data breach in the insurance industry is $6.58 million.
Yet this pales in comparison to the lasting reputational damage and erosion of customer confidence.
No one wants to do business with a company that cannot properly secure sensitive information. Especially in the insurance industry, where people entrust companies with highly private data about their finances, health, and more, any perceived lack of cybersecurity hygiene has an outsized impact.
Insurers simply cannot afford to be complacent. Robust cyber defenses must be a top priority not just to avoid fines and lawsuits, but even more crucially, to maintain customer trust and protect the brand reputation.
Take the first step to security by assessing your current defenses here.