Cybersecurity 101 for Insurance Agencies

The insurance industry is a prime target for cybercriminals because of the sensitive information they carry. According to Statista, the financial sector recorded more than 2,500 cybersecurity incidents between 2020 and 2021, with small businesses receiving the most attacks.

It’s an alarming figure that should raise the concerns of insurance agencies and encourage them to take proactive steps in protecting client data. Personally identifiable information (PII) like names, addresses, and social security numbers are at risk of unwanted access. The last thing you want is to suffer from a data breach and face a client lawsuit due to negligence on your behalf.

So, how can you ensure your insurance agency is well-protected from cyber threats? This article will discuss the basics of cybersecurity and how you can take the right steps to prevent data breaches.

What are the challenges insurance agencies face in terms of cybersecurity?

Almost every business is at risk of cyber attacks, but the insurance industry possesses unique traits that make them an ideal target for criminals. Here are the main challenges agencies face regarding cybersecurity:

1. Slow to implement modern technology

The insurance industry is known to resist change and rely on old-fashioned methods to run its operations. From using paper files to outdated software, many insurance agencies leave gaps in their cybersecurity due to these tendencies.

Such low-tech practices aren’t ideal in the modern world, where hackers are more tech-savvy than ever. Not only that, but the lack of modern technology puts insurance agencies at risk of physical break-ins, which can devastate agencies of any size.

2. High-value information

Cybercriminals view ill-equipped agencies as potential gold mines, as the information they hold can translate to tens of thousands of dollars. But they don’t only target client information as hackers can also obtain data from brokers and use them for evil purposes.

With such a large volume of high-value data at risk, it’s up to the insurance agencies to shore up their defenses and do everything in their power to prevent cybercriminals from gaining access to this information.

3. Unorganized data

Insurance agencies face difficulty organizing their data with so much information to store. Data that isn’t structured is more susceptible to attacks because they don’t fall under a protection system. Think emails, audio/video files, and server/website logs.

Due to their complex nature, insurance agencies must be mindful of which files contain sensitive information and store them in databases or applications. Doing so ensures only the right people have permission to access unstructured data, making them more difficult for hackers to obtain.

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How can insurance agencies fortify their cybersecurity?

Now that you know why hackers attack insurance agencies, the next step is to shore up your data protection. While no measures will 100% eliminate the risk of cyber attacks, you can lower the possibility of a data breach to a significant degree. Here’s how:

1. Use multi-factor authentication (MFA)

Multi-factor authentication is one of the best ways to deter hackers from accessing sensitive information. By adding a secure method to authenticate the user, cybercriminals will have a tough time logging in and stealing whatever information they can find.

MFA uses a minimum of two verification methods to obtain access to an account or network. For example, if you have MFA enabled, you must input your password and a one-time passcode sent to your smartphone. Other devices require a fingerprint, which some may argue is less secure. But, the extra authentication method is still useful, as fingerprints are kept safe in a device’s TEE (trusted execution environment) and encrypted for security purposes.

While it may add a bit of inconvenience when logging in, the added layer of security offsets is more than enough for insurance agencies to start using MFA.

2. Move data to cloud storage

Transitioning to cloud storage should be a top priority for insurance agencies that want to beef up their cybersecurity. Cloud storage providers store their servers in secure locations with highly restricted access. Couple that with data encryption and consistent security updates, and your client’s information is well-protected.

But security isn’t the only benefit of cloud storage. By storing data on the internet, file sharing and access are easier. Only this time, you benefit from stronger security measures, giving you peace of mind when sharing sensitive information.

3. Have a strong backup and data recovery strategy

Data loss can happen to anyone at any given time. No matter how secure you think your backup strategy is, it’s worth evaluating it to ensure your files are recoverable in case the unthinkable occurs. External backups are fine for storing accounting records but are not the ideal option for keeping sensitive data.

Cloud backup is the best option for insurance agencies as it’s the most reliable and secure form of backing up data. A copy of your agency’s data gets transferred over a secure network and into a cloud-based server. Since your data is kept off-site, you benefit from advanced security and protection like 24/7 surveillance, top-grade data encryption, and file backups from multiple servers.

Plus, the backup process runs automatically, so you don’t have to worry about routinely backing up your files. Every insurance agency should utilize cloud backups for its data recovery strategy for enhanced client data protection.

4. Use a next-generation firewall (NGFW)

Most people are familiar with a firewall, a security gate that tracks and filters traffic between a private network and the internet. But not all businesses use the next-generation firewall, a more advanced version that offers superior security and network management over the previous version.

NGFWs rely on several security technologies to block malware and filter packets based on applications. These features don’t exist with the traditional firewall, which is why insurance agencies need NGFW to reinforce their defenses against intrusive software.

The added threat protection also gets upgraded automatically whenever a new threat arises. By scanning applications for potential vulnerabilities, the risks of confidential data leaks go down. Most importantly, NGFWs can detect attacks based on suspicious activity, traffic behavior, and threat signatures.

5. Create an incident response plan

No cybersecurity measure is complete without an incident response plan. This set of procedures is your last line of defense against cyber attacks, and every insurance agency should create one in case of an emergency. There are six steps in creating an incident response plan, and these are:

  1. Preparation – Conduct a risk assessment and identify security issues that need addressing. Each staff member should be responsible for communicating, detecting, and responding to cyber-attacks. Prepare a list of contacts like insurance and local authorities during this stage.
  2. Identification – Identify suspicious network activity, phishing emails, and other potential threats. When a threat arises, determine the scope of the attack and obtain details on compromised security measures.
  3. Containment – If a verified attack occurs, the first response is to contain the incident. Isolate compromised networks and take down servers affected by the attack. Apply temporary fixes and work towards building a clean system as part of long-term containment.
  4. Eradication – Pinpoint the root cause of the attack and eliminate malicious software that led to the data breach. Upgrade compromised security measures to limit the chances of a similar attack happening in the future.
  5. Recovery – After neutralizing the threat, the next step is slowly returning the affected systems. During this stage, ongoing monitoring is crucial to ensure everything is working properly and that there are no existing security gaps.
  6. Awareness – The last step involves routine assessment, identification, and cybersecurity fortification. Review the previous attack and determine whether the team handled the incident satisfactorily. If not, highlight the issues that need addressing to ensure adequate response in the future.

Having an incident response plan limits the attack’s extent and reduces its impact on your agency. Consult with a cybersecurity expert to create an incident response plan that’s suited to your agency’s needs and capabilities


As more and more hackers target insurance agencies, it helps to be proactive and take the necessary measures to improve cybersecurity. By following these tips, you can shore up your defenses against cybercriminals and minimize the damage of any attack that goes your way.

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