Before insurers can offer effective coverage to their own customers, they must ensure that their own cyber security is up to the task. If they are vulnerable, their reputation as an expert in the field of cyber security insurance will be tarnished and they will lose consumer trust. The masses of sensitive and confidential personal data insurers possess could turn them into victims of cyber threats themselves. Worse yet, they could unwittingly surrender confidential customer data, possibly exposing them to massive class action lawsuits. Data breaches in the insurance industry can potentially inflict huge costs on insurers.
Insurers are an attractive target for cyber attacks. They are replete with massive stores of consumer data including credit card, medical bank account and confidential underwriting information. This data is “gold” to hackers looking to commit identity theft, or insurance fraud.
A KPMG survey of 100 insurance CEOs revealed that less than 20% believed that their organization is fully prepared for a cyber attack. They cited cyber security as their most pressing risk (42%), which means it was viewed as being more significantly risky than other difficult areas, such as regulatory risk.
The shift to digital depends on insurers maintaining customer trust, which of course requires strong cyber security discipline. They must defend themselves, and consequently, their customers and customer data, against all attacks and breaches, especially as cyber outlaws become more sophisticated.