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Insurtech Security Essentials: 5 Non-Negotiable Must-Haves

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As the insurance industry embraces the digital revolution, transitioning from legacy systems to cutting-edge technologies, it finds itself navigating a perilous landscape of escalating cybersecurity threats. The allure of enhanced customer engagement expanded product offerings, and deeper market penetration through digital channels comes with an inherent vulnerability: the risk of data breaches and cyber-attacks.

Deloitte
Deloitte

According to global consulting firm Deloitte, cyber-attacks in the insurance sector are surging as companies embrace digitalization. This shift, while promising innovation and efficiency, also exposes sensitive client data to increasingly sophisticated threats. The consequences of a security breach are not merely financial, as IBM’s Cost of a Data Breach Report attests, but also extend to irreparable damage to brand reputation and client trust.


“Securing data is a complex endeavor,” notes Jared Lesar, Head of Legal at Insurtech platform Root. He emphasizes the importance of a multi-layered security approach spanning infrastructure, network, development, and staff behavior to safeguard client data effectively.

Government regulations and industry standards provide crucial guidance in navigating this security landscape. Compliance with frameworks such as the UK’s Financial Conduct Authority Handbook and South Africa’s Fiscal Sector Conduct Authority’s proposed cyber security standards is imperative. Additionally, adherence to industry standards like ISO 27001 and SOC2 ensures robust security practices.

Lesar outlines 5 key areas governed by regulations and standards in the Insurtech space:

Cloud Infrastructure: Leveraging cloud-hosted data offers inherent security advantages, including built-in protection features and redundancy measures. Insurtech’s should prioritize platforms that allow private instances in preferred cloud regions.

Network Security: With cyber threats proliferating, robust network security measures, including firewalls and intrusion detection systems, are paramount to thwart malicious activity.

Access Control and Authentication: Implementing stringent access controls, including two-factor authentication and password management protocols, minimizes the risk of unauthorized access.

Secure Development: Embedding security into the development lifecycle is crucial. Insurtech platforms should ensure segregation of development and production environments, adherence to secure coding practices, and rigorous code reviews.

Security Auditing: Third-party security audits validate internal security controls, offering clients transparency and assurance. Insurtech’s should be forthcoming with audit reports, demonstrating their commitment to robust security practices.

In conclusion, the rise of Insurtech heralds unprecedented opportunities for innovation and growth. However, these advancements must be underpinned by a steadfast commitment to cybersecurity. By embracing stringent security protocols and regulatory compliance, Insurtech’s can mitigate risks, foster client trust, and chart a course towards sustained success in the digital era.

By Jared Lesar, Head of Legal at insurtech

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