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• October 29, 2024
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In October 2024, Star Health Insurance, a leading health insurer in India, had a big data breach that affected personal info of about 31 million customers.

A hacker named ‘xenZen’ said he got 7.24 TB of data and wanted to sell it online for $150,000, while smaller pieces cost $10,000 each. This raised a big concern  about how data is kept safe by the company and in the whole industry.

This event highlights how important it is for insurance companies to have strong cybersecurity steps and regular security audits to avoid such instances. 

The Growing Cyber Threat Landscape in Insurance

The insurance industry is a tempting target for cybercriminals because it has a lot of sensitive personal and financial data. Recent incidents show how serious this issue is:

• In 2023, Delta Dental had a data breach that compromised customer names, financial account numbers, and credit card details.

• Fidelity National Financial, a major title insurer in North America, faced a cyberattack in October 2023 that led to major service disruptions.

• American Family Insurance had to shut down parts of its IT systems in 2023 because of a cyberattack.

A report on cyber insurance claims revealed that ransomware was responsible for around 81% of claims related to recovery expenses4. This highlights the urgent need for strong cybersecurity measures in the insurance industry.

Benefits of Regular Cybersecurity Audits

Here are some of the benefits of regular security audits: 

1. Finding Vulnerabilities in the Early Stage 

Cybersecurity checks assist insurance firms in spotting and fixing security gaps before they can be taken advantage of. 

As Devin Partida, Editor-in-Chief of ReHack.com, mentions: “Only 52% of firms do security checks, but those that do have a 40% less chance of facing a data breach than those that do not.”

2. Meeting Compliance Requirements And Regulations

The insurance field has many strict rules about data protection. Routine checks help firms follow laws like HIPAA and prevent expensive fines. For example, Anthem had to pay a huge $16 million fine in 2018 for HIPAA mistakes due to a data leak.

3. Gaining Customer Trust

Trust matters in insurance more than anything else. Showing a commitment to data safety through regular checks can greatly boost customer trust. 

This is very important since the insurance industry faced losses of around $6.5 billion from fraud last year, mostly because of digital changes and weak cybersecurity measures.

Key Focus Areas for Insurance Cybersecurity Audits

1. Data Protection: Assess how customer data, including personally identifiable information (PII) and financial details, is collected, stored, and transmitted.
2. Access Controls: Evaluate user access rights and authentication processes to ensure only authorized personnel can access sensitive systems and data.
3. Incident Response Planning: Assess the effectiveness of existing incident response plans and procedures to minimize the impact of potential security breaches.
4. Employee Training: Auditors assess training frequency, content, and effectiveness. They evaluate how well employees understand and apply security policies. Simulated phishing exercises may be conducted. Recommendations often focus on improving training regularity and relevance.
5. Third-Party Risk Management: Security practices of vendors and partners with access to company systems or data are evaluated. Auditors review vendor selection processes, contractual security requirements, and ongoing compliance monitoring. 

Implementing Effective Cybersecurity Audits

To implement an effective cybersecurity audit strategy, insurance companies should:

1. Conduct Regular Audits: Schedule comprehensive audits at least annually, with more frequent assessments for critical systems.
2. Employ Advanced Technologies: Utilize AI and machine learning tools to enhance threat detection and response capabilities.
3. Engage External Experts: Collaborate with cybersecurity specialists to gain fresh perspectives and stay updated on emerging threats.
4. Foster a Security-First Culture: Implement ongoing employee training programs to create a culture of cybersecurity awareness.

The Cost of Neglecting Cybersecurity

The financial effects of cyberattacks on insurance firms can be very high. For instance, the Anthem data breach is thought to have cost the company around $260 million. 

This amount may include legal fees, fines from regulators, and efforts to recover. By putting money into regular cybersecurity checks, insurance companies might be able to prevent these large financial losses and harm to their reputation.

Conclusion

With increasing digitalization in the insurance industry, the threat landscape has expanded manifold and it’s increasing continuously.  That’s why making regular cybersecurity audits very important. 

These audits act as a way to defend against cyber threats, helping insurance firms protect customer data and comply with regulations. 

Investing in cybersecurity audits should not be construed as a liability. This can strengthen their defenses against cyber attacks, keep customer trust in your company, and make sure their digital operations can last in the long run.