Cybersecurity is already among the top trends in many markets but especially among insurers.
As the year is launched with the announcement of all new forms of technology, such as those being demoed at the Consumer Electronics Show (CES), the insurance industry is hoping that a larger focus will be placed on cybersecurity and data security.
A number of high profile data breaches occurred throughout 2015, including among large insurance companies.
Following the data breaches of health insurers Anthem and Premera, the insurance industry was given the evidence it needed to realize that it was far from impervious to the cyberattacks that have been hitting virtually every other type of company as well as governments. These hacks have been placing the private, sensitive and financial information of millions of consumers at risk simply because of the sheer quantity of data that is collected from them in order to be able to provide them with coverage. According to the CISO of Amica, Gil Bishop, insurers don’t have any choice but to boost their data security as they investigate new technologies to improve their efficiency and customer experience.
As the insurance industry embraces technological innovation, the ability to maintain confidentiality must be prioritized.
This, according to Bishop, who said “Ensuring the privacy and confidentiality of customer information in a rapidly evolving mobile insurance marketplace is challenging.” He also explained that “Issues range from how to sufficiently authenticate the user of a mobile device, to how to effectively provide end-to-end protection for payment and other sensitive transactions. Finding the appropriate balance between usability and security is critical.”
Aside from the impact these cyberattacks have on the reputation on an insurance company and on the satisfaction of its customers, it is important to recognize that there is also a considerable amount of money on the line. The May 2015 Cost of Breach Study conducted by the Ponemon Institute estimated that a data breach can bring about an average cost of $154 per affected customer record. The average overall damage that is experience by a company in the insurance industry is $3.79 million per cyberattack that reaches customer records.