Cybercrime in the Insurance Industry: Are You Prepared?
Fraud rates remain at record highs, and according to the 2020 Global Economic Crime and Fraud Survey conducted by PricewaterhouseCoopers (PwC), 47% of the 5,000 companies across several industries that were surveyed experienced a fraud in the past 24 months. Cybercrime ranks second among the most common types of fraud that companies face and can result in substantial financial impacts along with damage to company brand and market share. This means that cyber risks are among the top issues that businesses must consider when it comes to their resilience and continuity planning.
Cyber intrusions are becoming more commonplace, more dangerous, and more sophisticated. The primary goal of cybercriminals is to steal confidential data and misuse it for criminal purposes. In many companies, data is recorded, processed and saved in the course of documentation and document creation, and these processes are possible targets for cybercriminals.
Here, we take a closer look into why the insurance industry is a popular target for cyberattacks, and how to protect sensitive information from being compromised.
Why the pressure is rising for insurance companies
Insurance companies process a large amount of confidential data from claimants, lawyers, medical institutions, law enforcement agencies and other parties involved in their everyday workflow. As much as new technology has provided a platform for business innovation and growth, it has also brought new risks. Applications and platforms for damage reports are trending as insurance companies aim to be more accessible to their customers through digital services. However, the more data that is moved to a digital platform, the more vulnerable it becomes to cyberattacks.
In a 2017 report about cybersecurity and the insurance sector, KPMG reported that insurance companies are lagging behind in data protection efforts compared to other financial institutions, like banks. Cybercriminals will move to the point of least resistance – as banks strengthen their defenses, cyberattacks may increase in the insurance sector. Only 43% of the CEOs of global insurance companies that were surveyed by KPMG said that their company is fully prepared for cyberattacks. In addition to the financial damage caused by a data leak, cybercrime can cause long-term and devastating effects such as loss of reputation.
Protection from the inside: guide and train employees
Cybercriminals specifically look for the weaknesses in a company’s security structure, and it is often the employees themselves who open e-mails with malware and thus enable hackers to gain access to the company network and sensitive data. Security standardization, regulatory guidance, compliance programs and regular employee training are key to IT security success and effectiveness. Technology that is purpose-built for the insurance industry can also help to protect confidential data.
We have put together 6 quick tips for the insurance industry when it comes to data security and battling cybercrime.
For more insurance industry tips, check out this blog post: Easier, End-to-End: Reducing Friction in Claims Processing
Have questions or want to know more? Leave a comment and let us know!