Cyberattacks are a serious threat to any organization, but there has been a growing threat of cyberattacks in insurance. According to cyber insurance and security provider Coalition, ransomware demands have considerably increased from the first half of 2020 to the first half of 2021. In fact, the average ransom demand made to Coalition’s policyholders increased nearly threefold, from $450,000 to $1.2 million per claim.
During this time, business email compromise attacks increased by 51%, and funds transfer fraud (FTF) attacks increased by 28% with the average funds stolen in an FTF attack increasing by 179% from $116,842 to $326,254. This substantial increase is in part due to some policyholders’ fear of making payments online. Last year, in our State of Online Payments survey, we learned that 33% of policyholders surveyed are hesitant to pay their premiums online out of concern for their safety — and with this trend in cyberattacks, it's easy to see why.
Small insurers are becoming a major target
According to Coalition’s report, small and micro-insurance organizations are becoming cyberattack targets with a 57% increase in the frequency of cyberattacks against organizations with under 250 employees. Why such a large increase? Coalition believes increased automation of cyber attacks combined with the widespread use of insecure remote access tools during the pandemic has made smaller organizations more exposed.
It’s important to note that insurance organizations aren’t the only ones affected by cyberattacks— small towns and utility providers have seen an increase in cyberattacks as well. For small utility providers, budget may be limited, and security software may not be a top priority. If security software is installed, it’s often not properly maintained and managed, leaving holes in your system that cybercriminals can exploit. These cybercriminals know that while the ransom they extort may not be as big as an attack on a larger organization, it’ll be less work for them to get just as much money from smaller organizations.
What is cyber insurance?
So, what exactly is cyber insurance? And does your organization really need it? Cyber insurance works to mitigate losses suffered from a cyberattack including network damage, data breaches, extortion demands, hacking, and more. Typically, general liability insurance or property insurance doesn’t include coverage for cyberattacks, so it’s crucial for organizations to consider having this separate line of coverage.
In short, yes — your organization does need cyber insurance. With these types of cybercrimes on the rise, it’s more important than ever to protect your organization, your policyholders, and their information. It’s not enough to just prepare for the worst — simply just securing cyber insurance still leaves your organization and your policyholders vulnerable. Enlisting secure software solutions is the best way to proactively protect your organization — especially when it comes to your billing and payments software, considering the recent spike in FTF fraud.
Leveraging SaaS to prevent cyberattacks in insurance
Software as a Service (SaaS) technology keep insurance organizations protected so they hopefully never need to utilize their cyber insurance. SaaS solutions are cloud-based software models that deliver continuous improvement with no maintenance on your part—guaranteeing your organization always has the best and up-to-date security patches to remain compliant with industry standards.
For payment solutions, SaaS technology not only safeguards organizations against compliance liabilities but alleviates policyholder concerns about making online payments—keeping your organization safe and your policyholders protected.
Interested in learning more about what SaaS is and what it can do for your premium payment collections? Download a copy of our free ebook, The Benefits of Software as a Service: Why SaaS is the Best Delivery Model for Payment Solutions, right here.