Top 5 cyber risks for insurance companies

RiskXchange Top 5 cyber risks for insurance companies RiskXchange The leader in Third-Party Cyber Risk Management

Today, the cybersecurity landscape finds insurance companies struggling to fend off aggressive and costly cyberattacks as cybercriminals breach traditional defences with sophisticated and unprecedented attack methods, which poses significant cyber risks for insurance companies.

Before the pandemic, an average insurance company would face over 113 cyberattacks per year, with a handful of incidents proving successful in breaching their defences.

Since the onset of COVID-19, this fact has only been exacerbated owing to a variety of disruptions to traditional workplaces and business as usual. In this post, we examine some of the biggest risks the insurance industry faces at present and what this means for their cybersecurity investments and risk management strategies. 

Biggest cyber risks for insurance companies

Third-party cyber breaches 

Over 88% of insurance leaders claim they use a third-party provider to perform certain critical aspects of their operations. The unprecedented expansion of vendor networks in recent times has increased the attack surface for most insurance companies, leaving them vulnerable to a breach from their vendors.

Today, cybercriminals can access these systems through a compromised vendor, endangering your systems and leaving you at risk of a cyber breach. 

To prevent cyberattacks through vulnerable third-party vendors, you need to invest in robust attack surface monitoring solutions and a robust TPRM strategy

Social engineering attacks

Social engineering attacks are on the rise given their increasing sophistication and the growing gaps in employee awareness of cybersecurity basics. This lack of awareness often stems from a lack of training and opens insurance companies to a host of security problems.

Leveraging social engineering attacks that impersonate trusted authorities or institutions, cybercriminals dupe insurance professionals into handing over sensitive information, exposing their data to cyber theft.

Besides the loss of data, insurance companies also run the risk of losing money as a result of whaling attacks; a type of social engineering attack where cybercriminals send executives a spoof email to dupe them into authorising massive cash transfers. 

Whaling attacks have become more frequent in the recent past, growing by more than 100% in just one year, prompting security experts to predict that they will only continue increasing in the future.

Ransomware attacks

Recent studies show that ransomware attacks have grown by over 350%, positioning them as the preferred method of attack for countless cybercriminals.

Ransomware is devastating because of the scope and scale of its damage to company finances, operational stability and reputation. When hackers hold data hostage, most businesses prefer to pay the ransom to resolve the matter as soon as possible. This reticence to combat cybercriminals and pay the ransom is one of the factors that point to why it’s so prevalent. 

Today, ransomware prevention requires a multi-pronged approach. Besides installing anti-ransomware software, you need to comply with other cybersecurity best practices such as backing data up, updating dated software, and training employees to detect and respond to these attacks better.

Cloud exploits 

As insurance companies adopt cloud-based systems, they expose themselves to a greater level of cloud exploits, such as denial-of-service and hijacking attacks, allowing cybercriminals to access insurance systems, tamper with data and prevent employees from accessing it. 

What’s more, working on the cloud creates a larger attack surface, making it harder to secure it from an attack. That’s why you need to consider a cloud security posture management.

Poor security posture

Protecting data from cyberattacks and cloud exploits requires a robust cybersecurity posture that can withstand a range of risks and attacks. 

The challenge is that to date, many insurance companies still rely on questionnaires, penetration tests, and on-site assessments to determine how strong their cybersecurity posture is. These methods require arduous processes and only provide a point-in-time snapshot of a company’s cybersecurity, which falls short of what companies need to do to secure their data. 

To combat cyber risks for insurance companies, security teams require sophisticated tools to monitor their posture in real-time; automated tools allow insurers to do so and get a more accurate idea of their security in a shorter time.

Cyber risks for insurance companies: Moving into a more secure cybersecurity environment

In 2022, we expect cybercriminals to be more sophisticated, relentless and knowledgeable about bypassing traditional security defences. 

To mitigate this problem, businesses should devise cybersecurity plans that manage serious cyber risks for insurance companies and invest in cutting-edge risk management software. 

Solutions, such as a vendor risk management platform, can help you create a more secure cybersecurity environment. They also help you assess your security posture more efficiently to give you a better picture of your security posture, addressing internal and external cyber risks insurance companies face comprehensively.