As insurance companies work with sensitive customer information, they are seen as a desirable target for prying eyes and cyber attackers. It was reported that in 2021, data breach costs increased from $3.86 million to $4.24 million, which is the highest increase in 17 years. The rise and severity of cybercrimes in the insurance industry have prompted companies to double up on data protection to ensure the safety of their customers’ personal data. Read on to learn about the latest data protection and cybersecurity practices by insurance providers to safeguard customer data.
Government Policies and Laws
From internal operations to customer-facing programs, the insurance industry has always been subject to a range of federal policies and regulatory laws. These laws were mandated in order to strengthen data protection measures and reduce the chances of data breaches in the insurance sector. Some of the enacted laws include the General Data Protection Regulation (GDPR), the Gramm-Leach-Bliley Act (GLBA), and the Sarbanes-Oxley Act (SOX) to name a few. Failure to comply with the imposed policies can be highly consequential and may damage the company’s reputation in the long run. Beyond regulatory policies and government laws, insurance providers in the industry are also working with reliable cybersecurity partners to keep customers’ data safe at the forefront of their priorities.
Modern IT Solutions
Through the help of modern IT solutions, any unusual activity can be immediately informed to prevent security incidents long before it happens. These modern tools help insurance claims fraud detection processes to have a high degree of accuracy to promote customer satisfaction and avoid prolonged investigation during a period of stress. One notable example would be AI-based behavior analytic tools that detect anomalies in the routine of internal users and prevent possible account compromise among employees. Encrypting electronic data is also an ongoing practice that helps insurance providers comply with data protection requirements and avoid hefty penalties associated with data breaches. This ensures customer data won’t be stolen from an employee on his way to work or be simply copied onto a USB stick when a laptop is forgotten in a coffee shop.
Data Protection From Third-Parties
Data breaches can ruin the reputation of any insurance company and will result in loss of customer trust. This is why insurance providers are obliged to monitor third-party service providers with dedicated cybersecurity tools and stringent policies to control who can access customers’ data and up to what extent. Given that a vast majority of insurance companies conduct their business online, regular security tests and upgrades are also done to ensure new vulnerabilities are discovered and their portal is secure before they go live. By ensuring that sensitive customer information stays secure from third-parties, insurance providers foster trust among customers and establish a relationship that promotes loyalty.
Due to the sensitive nature of the information they gather, insurance providers are more subject to strict data protection than other businesses. Thankfully, in today’s digitized workforce, many data protection policies and modern tools are available to mitigate both internal and external threats from exploiting the vulnerabilities within a system.
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