Cybersecurity for InsurTech: Is Risk Minimized in the Cloud?

4 min read
Sep 10, 2022 4:00:00 PM

The age-old game of cat and mouse between InsurTech providers and hackers has now reached a higher level. According to a survey by Ernst & Young, businesses were the target of an unprecedented increase in cybersecurity threats in 2020. Industries that experienced ransomware attacks in 2020 were compensated in bitcoin to the tune of $370 million, a staggering 336% higher than in 2019. Covid-19 certainly led enterprises to take ad hoc actions that disregarded cybersecurity norms, which is one of the key causes.

The widespread availability of cutting-edge internet tools has also made it possible for almost anybody to become a cyber hacker. People searching for it may find ransomware-as-a-service on the dark web. There are ways to make it as difficult as possible for cyber thieves to breach the protective shield, even though erecting as many barriers as possible between sensitive data and them may seem like something out of a Bond movie.

The emergence of cloud hosting in InsurTech

Long before cloud hosting became popular, many insurers preferred their on-premise InsurTech systems because they felt they had more control over the former and could better manage security measures. This has changed, though. The most pressing reason for moving to the cloud was the requirement for the cloud in digital transformation as well as the urgent necessity to develop a mobile remote workforce.

However, the longer-term benefit of the cloud is the increased security it gives carriers against online attacks. For InsurTech organizations, the cloud can enhance cybersecurity in five critical areas.

  • Security is in-built into the solution

The program includes cloud security as a core component rather than as an optional extra. The level of complexity of their cybersecurity solutions is frequently how the top cloud hosting companies set themselves apart. By utilizing a cloud service, businesses can be guaranteed that their security is continually reviewed and improved. The advanced level of cyber risks that businesses are currently facing means that merely carrying out standard audits could not provide sufficient advancement.

A specialized cloud security team that is always looking for threats and plugging gaps is frequently present among cloud providers. Through a proactive strategy and comprehensive cloud security controls, the danger of data compromise by cybercriminals is significantly reduced. When vulnerabilities are fixed before hackers can use them, cybersecurity for InsurTech firms is improved.

  • Data is protected at all stages

Customers are requesting self-service and InsurTech mobile apps more frequently, according to InsurTech carriers. While adding more users to the system increases risk, these additions may surely improve customer experience. For instance, when using mobile InsurTech apps, data must be moved from the main storage facility, where it is at rest, to the user's app, where it is in transit. Data protection is essential throughout both stages. Due to hackers' ability to intercept wireless channels used for transmission, data in transit is especially susceptible to breaches.

Through cloud data security features like encryption and multi-factor authentication, cloud security measures can protect data while it is at rest and while it is in transit. Multi-factor authentication ensures that only users with the proper authorization can view the data, while encryption ensures that cyber hackers cannot decode data even if they do obtain access to it.

  • Users are provided with role-based access

Another technique is to guarantee that users only access what they are authorized to be through role-based access. This implies that inside a corporation, a young person in one area will perceive things differently from a senior employee in the same department. Lower designations will only have a small amount of authority to modify or carry out other actions using customer data. Additionally, departments won't be able to see information from other departments.

Importantly, with cloud-based InsurTech systems, very few, if any, users would have unrestricted access to data. This is crucial to prevent both data misuse for illicit purposes and data hacking using employee IDs. When an employee's access has to be quickly canceled, role-based access might be helpful. An employee's access to the data stays reasonably restricted for the first 24 hours after a successful access revocation, making it impossible for them to abuse or export the information.

  • Security lapses can be traced

Finding the source of a data breach in an on-premise arrangement might take a while because there is rarely a detectable trail left behind. Finding the sources of the leak and the volume of information that was released might take a very long time in on-premise systems. More information would leak if the security breach took longer to fix, which might result in bigger fines for InsurTech businesses. However, public clouds guarantee that every action leaves a digital trail. If data is breached, stakeholders will be notified right once and given access to information about how and where the leak occurred. This may help businesses fix problems quicker and limit harm.

  • The cost of cybersecurity on the cloud is lower

CIOs are unable to devote as many resources to cybersecurity as they may have liked due to the limited post-pandemic funding. Businesses want to invest as soon as possible in technology that allows them to operate remotely and meet evolving consumer expectations. However, if security infrastructure improvements aren't prioritized equally, businesses risk becoming more exposed to online attacks.

However, because cloud security is a built-in feature, InsurTech carriers may free up their resources, thanks to the cloud. Security solutions in the cloud are fully maintained and improved by public cloud providers. As a result, businesses do not require special staff or money for cybersecurity.

The most effective technical infrastructure for InsurTech providers is quickly becoming the cloud. Cloud data security may save IT maintenance costs, improve cybersecurity, and stop harmful assaults that could harm a carrier's brand permanently.

Do you have special queries or worries about fulfilling the criteria for cyber security? To find out how our team can assist you with preparing, lowering risk, and safely advancing your business, get in contact with TransformHub.