Insurers deal with enormous risks every day. Risk management is an inherent part of the insurance business. However, the sector has lagged behind other financial services sectors, such as banking, cyber focus, investment, and capabilities when it comes to the cybersecurity front. The banking sector’s increased cyber resilience has been due to the rising number of phishing and other cyber-attacks, which have compelled them to act quickly to protect their customers and reputations. However, the anti-phishing cyberwar has been quieter in the insurance sector.
But the trend is changing. As a more significant number of insurers are adopting robust anti-malware solutions, attackers are targeting organizations with weaker defense systems in place. The stakes are high for the insurance firms because they process vast amounts of data of their customers regarding their life, health, personal property, etc. They do not want a phishing email to compromise their hard-earned reputation!
What Makes the Insurance Industry Vulnerable?
The insurance industry is vast and interconnected to other industries such as brokerage firms, financial service organizations, policyholders and other subsidiary insurers, and many more. The insurance industry is vulnerable due to below discussed three main issues.
- Easily exploitable weak points: Due to such gigantic internetworking, an attack on a single node will enable the attackers to compromise the entire framework. The cyber intruders can attack the system with higher security by exploiting the weak points in the secondary system. Usually, threat actors use phishing or ransomware attacks for monetary benefits.
- Manipulating user access controls: User access controls are set within each insurer’s insurance infrastructure, including failure to truncate an account that no longer needs higher access privilege and unnecessary usage of higher privilege for dormant accounts. Cyber attackers usually aim for super privileged accounts with access to the insurer’s entire framework and can delete or add log files and enable or disable security measures. They try to get past both on-premises and cloud data storage facilities.
- High profile accounts: From various insurance firm-based cyberattacks, it is evident that attackers compromise high profile accounts and use them to escalate privileges through phishing and then access the organization’s confidential information assets. This information will then be used for demanding ransom from the firm or sold on the dark web, which will tarnish the insurance firm’s reputation.
Impacts Of Cyber-Attacks
To deploy the best phishing protection in their enterprise network infrastructure, the insurer must be aware of cyber incidents’ potential adverse consequences. These are listed below.
- Loss of Confidential Data: The insurers collect personally identifiable information of their customers, including health information, names, birth dates, street, email addresses, social security numbers, employment data, etc. The PII (Personally Identifiable Information) data is precious for the black market because malicious actors can use it for extortion, identity theft, and fraud.
- Disruption of Business: Every cybersecurity incident doesn’t involve data breaches; some may disrupt normal business operations. The malicious attacks on the insurer can result in substantial harm to the business, with sweeping recovery costs.
- Reputational Damage: The policyholder trust is the bedrock of the success of the insurance business. The trust ensures that the insurers will protect the collected information and reimburse the claims promptly when appropriate. If an insurer undergoes a cyber-attack and loses confidential policyholder information, it can break that trust. It will cause significant reputational damage to the insurer.
Cost Related To Such Cyberattacks
The primary cost incurred by cyberattacks on insurance companies is the cost of PII (Personally Identifiable Information), and this can be further categorized into three as discussed below.
- Direct costs: Direct cost is the cost incurred for various activities such as monitoring credit, notification expense, legal services expense, regulatory fines and penalties, the expense for business failures and repairs and public relations.
- Indirect costs: Indirect cost involves time and effort to spend on specific activities that are not directly involved with cash and not reported in any official documents.
- Opportunity cost: the opportunity cost is the cost that is lost due to loss of reputation, customer turnover, diminishing goodwill, higher customer acquisitions, and many more.
Best Defense – Robust Security Measures
As the amount of data that flows through multiple channels increases, attackers can easily find vulnerabilities and scale their attacks to higher levels. Since such attacks are mainly initiated using phishing emails, cybersecurity professionals are now looking for ways to identify spam and implement anti-phishing solutions, anti-malware, and anti-ransomware solutions and become more cyber resilient. Other security measures that must be adopted are summarized below.
- Regular data backups.
- Maintaining system logs.
- Annual reports to higher authorities.
- Business continuity and disaster recovery plans.
- Firewalls and intrusion detection systems.
- Multi-layered authentication protocols.
- Staff training programs and incentives.
- Incident response plan.
- Patch management program.
To conclude, it is evident that no matter how advanced the technology is getting, cyberattacks and threat actors will always seek out new sophisticated tools and techniques to compromise the cybersecurity frameworks of institutions. Due to the monetary benefits of data held by insurance companies, threat actors have now been looking at ways to exploit such infrastructures using phishing and ransomware. Thus, the insurers need to implement a broader response to tackle various challenges posed by the cyber-risk.