Insurance industry cybersecurity: Safeguarding insurance and fintech

Cyberattacks on insurance and fintech companies are surging. In 2023 alone, there were approximately 1,000 attacks weekly on insurance and legal businesses, marking an 11% year-over-year increase.

These attacks present substantial risks to business operations and financial stability. Both sectors’ reliance on digital infrastructure and data makes them prime targets for cybercriminals. Financial implications can be severe, including direct losses from theft or fraud, and indirect costs like regulatory fines, legal fees, and reputational damage.

A study of 150 insurance-related companies showed massive cybersecurity vulnerabilities in the industry supply chain:

1. 59% of reported breaches involved third parties and external partners

2. 23% of firms displayed critical security weaknesses

3. 56% of companies experienced at least one compromised credential since 2023

4. 17% of companies experienced malware infections and device compromises 

5. 85% of insurance companies experienced a cyber attack in the past year, according to Ponemon Institute 

To safeguard assets and maintain customer trust, insurance industry cybersecurity must be a priority. Insurance and fintech companies must implement robust cybersecurity measures, and cultivate a culture of awareness and preparedness to mitigate potential incidents.

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Insurance industry cybersecurity challenges

Research by GlobalData suggests that cyber investments should amount to 14% of total IT budgets, with the cybersecurity market projected to reach $290bn by 2027. High-growth areas include managed security services, application security, and identity and access management.

Key challenges:

1. Sophisticated attacks: Cyber threats are becoming more advanced, particularly with AI technologies that learn autonomously.
2. Expertise gap: Lack of cybersecurity expertise hampers the implementation of comprehensive security strategies.
3. Data silos: Some companies mistakenly believe siloed data enhances protection, but it can hinder threat detection and response.

Moreover, the cybersecurity industry is grappling with the threat of AI-led attacks, driving demand for advanced solutions.

This demand must align with IT budgets as organizations address AI’s impact on their operations.

5 ways to improve cybersecurity in insurance 

The rapid evolution of cyber threats necessitates continuous adaptation. AI can enhance both threats and defenses, requiring sophisticated understanding and implementation. Organizations need a wider range of skills to secure systems, networks, and data, especially with the rise of AI-based attacks.

Here are five key areas they should address:

1. Data protection: Understand critical processes and implement data loss protection tools.
2. Incident response: Quickly detect and respond to cyber threats.
3. Cloud architecture: Transition to cloud solutions for better data protection.
4. Continuous testing: Regularly test cybersecurity measures and their effectiveness.
5. Insurance coverage: Ensure sufficient insurance to cover potential cyber risks.

“There is a conscious need for companies to do more on cybersecurity now. Not only insurance, but every single company,” says Javier Gil, global lead for SAP’s Go to Market in the insurance industry.

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Cloud support for industry protection

Moving to the cloud can enhance insurance industry cybersecurity by providing advanced security features, secure environments, integrated security management, and robust threat detection.

Cloud platforms can also integrate AI-driven security solutions, offering faster threat identification and scalability.

Ultimately, insurance and fintech companies must recognize the urgency in strengthening their cybersecurity frameworks as the threat environment becomes increasingly complex. With so much at stake, they need to take action now.