The Premium on Keeping Customer Data Safe

26 Jan 2015
by John Foley
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According to a report released by Ponemon Institute, about 43 percent of businesses experienced a data breach in 2013, which was a 10-percent increase from the previous year. Insurance companies are one of the types of businesses that are attractive to cybercriminals because they need to handle a lot of sensitive data. Data breaches can hurt insurers badly as they can result in loss of reputation, productivity and revenue, as well as costly lawsuits. Here is a look at some of the measures that insurers are taking to keep their data safe….

Cross_MediaExamples of Insurance Companies That Experienced Data Loss

Variable Annuity Life Insurance found that one of its former financial advisers had a thumb drive that contained information on 774,723 of its customers. The information included partial or full Social Security numbers, but it was believed that the data was not used to access the customers’ accounts. This was not the first time the insurance company lost its data on a thumb drive. It filed a lawsuit against a former financial adviser in 2006 for downloading confidential customer data onto a portable flash drive. Northeastern Insurance is another insurance company that became a victim of data breach. A vendor of its investment division shared electronic files containing customer information with another broker-dealer who was also using the insurer’s services. The information included the names of clients, Social Security numbers and other types of account data. The data breach might have affected five customers from California, but the total number of people affected nationwide was not reported.

Importance of Data Protection

Many insurance buyers are aware that they will be putting their personal information at risk when they purchase an insurance policy, and they prefer to buy from insurers that have the best data security systems. As the following article shows, when they are choosing a health insurance plan, they may want to find out how a certain insurer shares their personal data with medical facilities, stores their information and restricts unauthorized data access. Insurance companies that can provide a high level of data protection will have a significant edge over their competitors.

Measures for Preventing Data Breaches

Insurance companies are using a wide array of measures to prevent data breaches. Some of them are implementing big data solutions to ensure data integrity and predict potential risks and incidents. Big data analytics enables them to analyze large amounts of insurance claims data to detect fraudulent activities, monitor data access more closely and develop systems that comply with data security regulations. Other technologies that are being used to improve data security include data encryption, data protection software and identity management and access system. Besides using technology, insurance companies can also keep their data safe by creating a data security policy, training their employees to protect data, using stronger passwords, controlling use of computers and portable devices, and implementing a good disaster recovery plan. As cybercriminals are becoming more skilled and sophisticated, insurance companies should step up their investments in data security.   About the Author: John McMalcolm is a freelance writer who writes on a wide range of subjects, from social media marketing to Cloud computing.[frontpage_news widget=”8263″ name=”Other Helpful QR Codes Posts”]

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