What makes the insurance industry a prime target for cyberattacks?
The insurance industry presents an attractive target for cyberattacks due to various reasons. Firstly, insurance firms gather and store a vast amount of consumer data, which is crucial for their underwriting and claims processes. This data encompasses personal contact information, medical records, identification documents, financial details, banking information, and social security numbers. If this data is compromised, it can lead to serious consequences. Malicious hackers can exploit such information to engage in insurance fraud and identity theft, perpetuating cyberattacks against unsuspecting individuals.
The second factor that amplifies cybersecurity risks for insurance companies is their heavy reliance on outdated legacy systems. While some companies have begun transitioning to digital platforms and modernization, the continued use of legacy systems exposes them to vulnerabilities. Moreover, poorly executed digitization efforts can have severe repercussions. The introduction of digital records not only creates new avenues for potential threats but also exposes insurance firms to risks from third-party sources.
Lastly, even companies equipped with measures to address data breaches are not immune to danger. Advanced and sophisticated hacker groups not only encrypt stolen data but also threaten to disclose it on public platforms. This double extortion technique means that even if a firm can restore its systems using data backups, it remains at risk of reputational damage and regulatory fines.
This combination of valuable data, inadequate cybersecurity planning, and a lack of employee awareness regarding cybersecurity risks makes insurance companies highly vulnerable to constant cyberattack threats. Fortunately, lawmakers have recognized this vulnerability and have taken action to establish and enforce regulatory standards for the insurance industry.
Major cyber risks facing insurance companies
Third-party cyber breaches
A vast majority of insurance leaders, more than 88%, rely on third-party providers to handle critical aspects of their operations. However, the rapid expansion of vendor networks in recent times has significantly widened the attack surface for insurance companies, making them susceptible to breaches through their vendors.
In today's landscape, cybercriminals can exploit these systems by compromising a vendor, posing a serious threat to insurance companies' security and leaving them vulnerable to cyber breaches.
To mitigate the risk of cyberattacks through vulnerable third-party vendors, it is essential to invest in robust solutions for monitoring the attack surface and implement a strong third-party risk management (TPRM) strategy.
Social engineering attacks
The frequency and sophistication of social engineering attacks have been increasing, taking advantage of the gaps in employee awareness regarding cybersecurity fundamentals. Insurance companies often face security issues due to a lack of awareness resulting from inadequate training.
Through social engineering attacks, cybercriminals deceive insurance professionals by impersonating trusted authorities or institutions, tricking them into revealing sensitive information and exposing their data to theft.
In addition to data loss, insurance companies also face the risk of significant financial losses through whaling attacks, a type of social engineering attack where cybercriminals send executives fraudulent emails to manipulate them into authorizing large cash transfers.
Whaling attacks have seen a substantial rise, increasing by more than 100% in just one year. Security experts predict that this trend will continue to grow in the future.
Recent studies indicate a staggering 350% growth in ransomware attacks, establishing them as the preferred method for numerous cybercriminals.
Ransomware attacks are highly destructive, causing severe financial losses, disrupting operational stability, and tarnishing a company's reputation. When hackers hold critical data hostage, many businesses feel compelled to pay the ransom to restore normalcy promptly. This willingness to comply with cybercriminals' demands is one of the factors contributing to the widespread prevalence of ransomware attacks.
Preventing ransomware requires a comprehensive approach. In addition to deploying anti-ransomware software, insurance companies should adhere to cybersecurity best practices, such as regular data backups, timely software updates, and comprehensive employee training to enhance detection and response capabilities.
As insurance companies increasingly adopt cloud-based systems, they expose themselves to a higher risk of cloud exploits, including denial-of-service and hijacking attacks. These vulnerabilities allow cybercriminals to gain unauthorized access to insurance systems, manipulate data, and impede employee access.
Moreover, operating in the cloud enlarges the attack surface, making it more challenging to secure against potential breaches. Therefore, implementing cloud security posture management is crucial.
Inadequate security posture
To safeguard data from cyberattacks and cloud exploits, insurance companies must establish a robust cybersecurity posture capable of withstanding various risks and attacks. The challenge lies in the fact that many insurance companies still rely on questionnaires, penetration tests, and on-site assessments to assess the strength of their cybersecurity posture. These methods are time-consuming and only provide a snapshot of the company's security at a specific moment, falling short of the necessary measures to protect their data.
To effectively combat cyber risks, security teams in insurance companies require advanced tools for real-time posture monitoring.
Ensuring the Security of Integrated Insurance Systems
The security of integrated insurance systems is of paramount importance as these systems increasingly rely on third-party applications to deliver a seamless user experience. To safeguard the integrity of these web services and their underlying APIs, regular security testing is crucial. This testing should encompass various measures such as vulnerability scans, penetration tests, and code reviews to promptly identify and address any vulnerabilities or weaknesses that may arise.
Furthermore, it is imperative to maintain the up-to-date security of all third-party applications by promptly applying the latest security patches and fixes. This proactive approach helps protect customer data from unauthorized access and potential breaches. Lastly, insurance companies should establish a comprehensive incident response plan to ensure a swift and effective response in the event of a security incident occurring. By implementing these measures, insurance companies can enhance the security posture of their integrated systems and minimize the risks associated with data breaches and unauthorized access.
In conclusion, it is crucial for the insurance industry to acknowledge the utmost importance of cybersecurity in an increasingly digital world. By implementing strong cybersecurity measures, insurance companies can effectively safeguard sensitive data, maintain the trust of their clients, and ensure uninterrupted operations.
Given the evolving nature of cyber threats, it is imperative to adopt a proactive approach and invest in continuous security initiatives to secure the future of the insurance industry.
ESKA stands as a distinguished provider, offering comprehensive services and tailored solutions specifically designed for the insurance sector.
Rather than waiting for a cybersecurity incident to occur, it is essential to protect your insurance company's digital assets and your policyholders' data with ESKA's extensive cybersecurity services and solutions.
Concerned about your security?
Schedule a consultation with ESKA today to take the necessary steps in reinforcing your cybersecurity defenses.