Cyber Risk Quantification (CRQ): Definition and Best Practices
Cyber Risk Quantification (CRQ) allows businesses to measure and manage their cyber risk.
Insurance companies are adopting digitalization to achieve more ease of access, automation, effective analysis, and improved processes, etc. The insurance industry is highly dependent on digitalization to perform its day-to-day operations and deliver services to its customers. Along with this digital transformation, cyber security risk is also involved, especially in small to midsize insurance enterprises.
Cybercriminals know that insurance companies have valuable data and information of their policyholders, which is a gold mine for threat actors. Therefore, insurance companies that are not taking steps to protect against cyber security risks are low-hanging fruits for bad actors.
According to Potiviti, there was a noticeable surge in successful cyber-attacks in the insurance industry. Personal data of over 100 million Americans have been compromised in these security breaches. While in the first quarter of 2021, one of the largest insurance companies in the USA, CNA Financial Corporation has paid $40 million as a ransom amount to regain access to their network. The interest of cybercriminals in the insurance sector is a sign that strict actions are mandatory to mitigate the cyber security risk in the insurance industry.
Companies that have the most valuable consumer data are hot targets for cybercriminals. Therefore, cyber security attacks in the insurance sector are increasing exponentially. A successful security breach can cause financial and reputation damage to the insurance companies. To avoid this loss, insurance companies must implement cyber security systems to protect themselves from the leakage of confidential data and other security breaches.
The most valuable data insurance companies have is the personal identifications and information of their customers. With the release of the data protection and privacy act, all companies are recommended to keep the customer's data secure and confidential, and if they did not do so, they may face legal proceedings in court and no insurance company wants that.
We have seen in the past, threat actors always try to steal confidential data from insurance companies and sell it on the deep web, use them in insurance fraud, demand ransomware, and blackmailing. No insurance company would want to find its sensitive valuable data stolen, which is why insurance companies need to take steps to make sure that their data is secure from threat actors.
According to SonicWall report, there were 304.6 million ransomware attacks in the year 2021. Cybercriminals inject malicious software into the computer system which is designed to restrict user access until the ransom is paid to unblock it.
Another common cyber security threat for the insurance industry is social engineering attacks. Bad actors physiologically trick the concerned employees of the company to gain access to sensitive information. Social engineering attack involves human error.
Phishing and impersonation attacks are most common in social engineering attacks.
Insurance companies are highly vulnerable to third-party attacks when they collaborate with outside third-party networks or vendors to service their customers. Every single time an insurer's network relates to outside their party or vendor network, there is a health risk of any malware injection or supply chain attack.
To defend against cyber security risks for insurance companies, a vigorous cyber security plan is needed. Gathering all information about what areas needs to be protected, how much cost it implies, how it will be implemented and checked, what effect does it have on the entire system, and how you will achieve your cyber security metrics and KPIs. Keeping compliance and data privacy regulations in mind and following the NIST cyber security framework can lead you to an effective cyber security system for the insurance business.
A zero-trust network is another effective solution to protect your system. Zero trust means not to trust anyone and always verify. By applying a zero-trust network you are authenticating and authorizing every single attempt to access your network. ZTN will protect your sensitive data by authenticating every user or machine who will try to access it and apply the least privilege to provide less access.
These three actions must be part of regular routine in cyber security practice. The security system will protect your network and monitor incoming and outgoing traffic and decide whether to allow it or not based on the principles you set.
A security system is essential when communicating with a third party or vendor. Always keep your valuable data encrypted, because, in case of any threat actor accessing it, they will only get gibberish-looking text instead of actual sensible data.
Lastly, daily backup is compulsory in insurance companies because data is added, modified, and deleted with high frequency in insurance companies on daily basis, so it is a clever move to take backup every day. Daily backup can save you millions of dollars in case of a ransomware attack.
Keeping track of how well your security system is performing is a key to improving your cyber security for an insurance company. You must monitor and analyses your cyber security performance according to the matrices and KPIs you have set. Additionally, testing your security system from time to time is a wise decision to check if it is securing your parameter properly.
Monitoring and testing will let you know the reliability of your cyber security system.
The significance of cyber security risks in the insurance business can be seen by the epidemic growth of security breaches in the insurance sector. Cyber-attacks can cause insurance companies heavy financial loss, reputation damage, and can lead them to court cases for not protecting the confidential information of policyholders.
Therefore, Insurance companies must take immediate action to implement robust cyber security plans which is able to prevent user personal data and the most common attacks happening in the insurance industry.