Why Cyber Resilience Is Crucial for Insurers Under GL20

Introduction 

Cyber threats are rapidly evolving, and cybercriminals are increasingly targeting the insurance industry. With access to vast amounts of personal, financial, and medical data, insurers are prime targets for hackers seeking financial gain or corporate sabotage.

The numbers reveal the alarming rise in risks. In 2023, cyberattacks on insurers increased by 55%, according to IBM Security X-Force. The average cost of a data breach in the insurance sector reached $4.45 million, as reported in the IBM Cost of a Data Breach Report 2023.  

The rising cyber security threats demand that insurers develop cyber resilience capabilities as a means to prevent, handle and restore from cyber attacks without interrupting business operations. The GL20 regulatory framework demands that insurance entities develop better cybersecurity and risk management strategies because of their vital importance.

This article explores rising cyber threats in insurance and the importance of cyber resilience.

The Growing Cybersecurity Threats in the Insurance Industry

Cyber threats against insurance organizations continue to intensify with destructive force, thus placing insurers at risk of major financial and reputation-related damage. Since cybercriminals continue building sophisticated attack approaches, insurers need to lead the field by recognizing the major cybersecurity threats that currently affect their operations.

Data Breaches: A Costly Problem for Insurers

Data breaches targeting the insurance sector happen with increasing frequency while their total costs continue to rise. Insurers become regular targets for hackers who steal personal data, including Social Security numbers and bank account details and offer affordable prices for stolen health records and policyholder data through the dark web.

In 2023, a successful cyberattack on Medibank, an Australian health insurance company, resulted in a significant data security incident. During this incident, the personal information and medical records of 9.7 million clients were exposed.

Ransomware Attacks on Insurance Companies

Attacks using ransomware techniques, in which hackers operate encrypted operational data while requesting ransom payments, have become far more common. The 2023 Sophos Cyber Threat Report states that ransomware attacks cost insurance companies 65% of their operations in the preceding year.

Third-Party Vendor Risks in Insurance

Insurance companies conduct all their claims operations through third-party vendors together with their data analytics tasks and cloud-based storage needs. External partners who work with insurance companies typically show weaker cybersecurity defenses because they lack proper security measures which makes breaches more likely.

The Benefits of Cyber Resilience for Insurers

The critical importance of cyber resilience has never been higher because insurers must protect from continuously rising cybersecurity threats. By adopting cyber resilience, organizations defend themselves from cyberattacks and achieve operational effectiveness and improved reputation rating and regulatory compliance. Building robust cyber resilience strategies provides insurers with several essential advantages which we will examine.

Enhanced Security and Risk Mitigation

The main goal of cyber resilience exists to allow enterprises to stand firm against cyber attacks and maintain operational continuity. Insurance companies safeguard both customer data and internal systems and company intellectual property through the implementation of predictive security measures.

Building Trust with Customers and Stakeholders

Insurance clients depend on trust as they provide their confidential personal data to insurance providers. Insurance customers depend on their companies to provide secure data protection systems.

Regulatory Compliance and Meeting GL20 Requirements

Compelling regulatory frameworks referred to as GL20 (General Liability 20) have emerged to mandate that insurance companies follow strict cybersecurity standards when confronting escalating cyber threats. Insurance providers must meet their cybersecurity obligations through multiple security standards as stipulated in GL20 while adopting operational risk practices for protecting sensitive data and showing resilience to cyber threats.

Reduced Financial Impact from Cyberattacks

Cyber resilience effectively reduces loss amounts when organizations face cyber threats despite the high initial financial costs of cyberattacks. Insurers with proper incident response plans experience fewer financial losses because they maintain operational continuity and prevent data theft.

The Role of the Cyber Resilience Assessment Framework (CRAF)

The Cyber Resilience Assessment Framework helps insurers check their cybersecurity systems. It shows weak points and helps them plan better defenses. The framework guides companies through a full risk check. It helps them match their security efforts with top industry standards.

How CRAF Helps Insurers Mitigate Risks

CRAF clearly identifies and handles cyber threats. It breaks down complex risks into simple steps, allowing insurers to act quickly and stay ready.

Full Risk Identification

CRAF helps insurers find cyber risks in all parts of their business. This includes vendors, staff, and tech systems. It gives a clear view of possible weak spots. This helps avoid serious losses or damage to reputation.

Focusing on Key Assets

CRAF helps insurers list their most important assets. These include customer data, financial records, and secret business info. They can then protect these first. This makes sure the security plan supports their core work.

Ongoing Updates

CRAF supports regular updates. As cyber threats change, insurers must stay alert. The framework pushes for constant checks and policy updates. This helps them stay ready for new risks.

Planning for Attacks

CRAF stresses the need for solid attack plans. It helps insurers make clear steps to follow during a breach. This includes recovery plans, talking to key people, and getting back to work fast.

Real-World Cyber Threats Faced by Insurers

The insurance industry now deals with a growing presence of computer-based security threats. Insurers become preferred targets of cyber criminals because they possess large volumes of personal data as well as financial documents. Specific cases show that organizations need to build advanced cyber resilience frameworks which defend them from modern threats.

Ransomware Attacks on Insurers

Insurance organizations experience Ransomware attacks as the dominant and destructive cyber threat plagues their industry. Cybercriminals employ this method by using encryption to seize insurer data, then they expect a payment to reveal it. The 2017 WannaCry ransomware attack spread worldwide to strike insurance firms and caused operational breakdowns that interfered with their service delivery. The cost of ransom payments brings substantial financial loss to insurers but the disruption from system outages and the resulting deterioration in customer relations and costly legal expenses create further burdens.

Data Breaches Involving Customer Information

Data breaches constitute a massive threat to the insurance sector, alongside various other dangers. Anthem became one of the largest insurance providers harshly impacted when hackers broke into their systems to reveal personal details about 78.8 million customers in 2020. The cyber attackers successfully stole vital personal records with social security numbers as well as street addresses and complete medical histories which resulted in economical damage and reputation degradation for the company.

Strengthen Your Cyber Resilience with ComplyNexus™!

The speed of cyber threats continues to increase so insurers need to maintain constant progress to safeguard data privacy while fulfilling regulatory needs. The GL20 framework requires organizations to implement powerful cybersecurity solutions which prove challenging to execute.

That’s where ComplyNexus™ comes in.

Insurance organizations benefit from ComplyNexus’s modern compliance risk management tools designed specifically to meet their sector’s needs. Our platform provides users with simplified GL20 compliance, together with streamlined risk assessments and improved cyber resilience capabilities through these capabilities: