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The Role of IT Governance in Strengthening Data Security for Insurance Companies

The Role of IT Governance in Strengthening Data Security for Insurance Companies

Data security is a very real concern for companies in all business sectors, but the dangers and risk factors are especially intense for companies in the insurance space. Insurance companies store large volumes of very sensitive information submitted by customers. 

There are numerous laws and regulatory oversight groups with rules and requirements for data management and data governance in the insurance sector. Customer data — especially the sensitive data that an insurance company collects — must be protected and there are additional regulations surrounding how that data is collected, transmitted, accessed, and stored. This all plays into a company’s IT governance strategy and it impacts plans for strengthening data security for an insurance company. 

The Role of Data Security for Insurance Companies

Insurance companies are prime targets for cybercriminals who are seeking to acquire large volumes of sensitive personal data. An insurance company collects a variety of different data points from its customers, including the following. 

  • Full names;
  • Birthdates;
  • Mailing and billing addresses;
  • Social security numbers;
  • Phone, email, and other contact information;
  • Employment information and income figures;
  • Health data and information on medical conditions;
  • Medication and prescription information;
  • Vehicle info, VIN numbers, license plate numbers; and 
  • Information on major life events such as marriages, divorces, births, and deaths. 

The type of customer data that an insurance company collects and stores could be extremely useful to a cybercriminal. It’s everything a criminal would need to steal an identity or even take over and “hijack” existing accounts. This volume and nature of the customer data that may be stored on file expand even further when an insurance claim is filed. With so much sensitive information in their possession, it’s easy to see why insurance companies are so tightly regulated in the realm of data governance and data management in general. 

Insurance Company Data Security from an External and Internal Risk Management Perspective

The outside world is the source of countless data security threats, with countless individuals and groups seeking to acquire an insurance company’s data stores. This data may be used for criminal purposes, such as identity theft or opening new accounts. It may also be used in conjunction with other schemes, such as ransomware, where the data is held “hostage” using data encryption.  In these cases, the cybercriminals demand a ransom fee to decrypt and release the data (though it ought to be noted that commonly, the data is never actually decrypted and recovered.)  In all instances, the potential cost to the insurance company and its customers is significant both in a practical operational sense and in terms of legal liability too. 

An insurance company’s data theft risk factors and areas of vulnerability aren’t limited to the external outside world, though. In other words, it’s not just some creepy random cybercriminal on the opposite end of the continent — or even on the other side of the world — who poses a threat to the insurance business and its customer data stores. There’s also an internal risk to consider — a fact that complicates an insurance company’s risk management strategy by leaps and bounds. 

Internal data security threats are very real. You have third-party contractors and vendors who must be screened using third-party risk management (TPRM) software. These platforms include background check tools, reputation checker capabilities, and TPRM reputation monitoring tools. 

When handling internal data theft threats, you also have actual employees to consider. Insurance company staff require intensive background and reputation checks at the time of hiring. But in addition to this, it is prudent to configure reputation monitoring to ensure that a member of the risk management task force is alerted in the event that any new personnel-related risks emerge. Life events and other happenings can lead an individual to engage in less-than-honest activities that may represent a risk management issue. 

Managing User Permissions as a Strategy to Strengthen Data Security for Insurance Companies

User access management is a key component for effective insurance company customer data risk mitigation. The best practice for managing user access involves creating permissions that grant each user access to the bare minimum required to perform their work duties. 

When all is said and done, the user should be able to access only the data that is needed in order to perform their job — nothing more and nothing less. This way, data is never exposed unnecessarily and as such, you reduce vulnerabilities and overall security risk levels. 

How Does IT Governance Strengthen Data Security for Insurance Companies? 

Implementing best practices in the area of IT governance can serve as an effective strategy for strengthening data security for an insurance company. The actual mechanism for improving data security using IT governance is relatively simple and straightforward: better data security is a natural side effect of implementing IT governance best practices.

Those IT governance best practices include some of the following measures. 

  • Establishing an IT governance task force that can meet on a regular basis to review risks and vulnerabilities, implement changes and oversee the progress of governance-related initiatives.
  • Reviewing and updating the company’s data-related policies and protocols. 
  • Maximizing encryption levels for in-transit data and data that are at rest within a secure data storage platform. 
  • Implementing firewalls and other protective measures for the insurance company’s data management platforms. 
  • Reviewing and updating user permissions — as discussed above — so any given individual has access to only the data they need to perform their work duties. 
  • Configuring security monitoring and alerts in cases where an anomaly is discovered
  • Developing an emergency response plan that can be deployed in the event of a data breach or another cybersecurity breach incident. 
  • Evaluating IT-related risks, vulnerabilities, and risk factors. Then, the task force must develop risk mitigation strategies to minimize risk and vulnerability points. 

These measures are not only IT governance best practices; they’ll also be very effective for strengthening data security for insurance companies and organizations in a variety of other industries too. Each insurance company’s risk management and IT governance landscape is unique to some degree. It’s important to remember this because there are no hard and fast rules for improving security levels and driving a company’s IT governance forward. Each strategy must be custom-tailored to some degree in order to maximize your chances of success. 

Harnessing the Best Technology for IT Governance and Secure Data Management

The right technology makes all the difference when it comes to effective IT governance and secure data management for your insurance company. Cloud-based data storage platforms have gained tremendous favor in recent years, in large part due to their scalability, security, and affordability. Cloud data platforms typically use a pay-as-you-go structure, allowing for flexible access to resources on an as-needed basis. 

At iTech, we specialize in providing our clients with the data management solutions they need to succeed. This is true in terms of security, scalability, and in terms of features and functionalities. We collaborate with the client to gain an understanding of their challenges, pain points, and strategic objectives. Then, we architect the ideal solution for their needs, whether it’s improved IT governance capabilities, better data security features, or another aspect of high-tech risk management. 

Contact the iTech team today and let’s begin a discussion about your insurance company’s IT needs and how we can help you leverage technology in a way that helps you achieve your future business objectives.