Securing Insurance: Mitigating Third-Party Risk for Insurance Carriers

The insurance industry, like most others, has become ever more interconnected, with complex networks of internal and external partners and third-party vendors like claims processors and data analytics firms. These partnerships are essential for seamless operations, but they introduce significant potential vulnerabilities that dramatically expand your attack surface.

Insurance carriers face a disproportionate level of supply chain risk. Just last year, 59% of insurance-related companies experienced a third-party breach, an alarming contrast to the all-industry average of 29%, according to Risk & Insurance. This alarming statistic reveals an important truth: traditional perimeter-based security is no longer enough.

To combat this escalating risk, insurance carriers must pivot to an "Identity First" security strategy. Identity security provides protection for every identity, both human and machine, offering frontline security that transcends your network boundaries. 

Identity and Access Management (IAM) provides the essential tools to verify who or what is accessing resources, what they can do, and under what conditions. By implementing a comprehensive IAM, insurance carriers can effectively mitigate their third-party risks, so they can protect their sensitive data.

Understanding the Third-Party Risk Landscape for Insurance Carriers

Working with third-party vendors is a necessary evil. From cloud services to banking, organizations of all sizes rely on a network of third-party tools and services to drive their business. 

The reliance on third-party vendors creates a variety of risks for insurance carriers. 

• Data Breaches: Third-party vendors are often given access to sensitive customer data, but how secure are they? Their inadequate cybersecurity program can lead to a data breach that exposes YOUR data. 
• Regulatory Fines & Non-Compliance: Insurance is a heavily regulated industry, but compliance takes a village. When it comes to compliance, it doesn’t matter where the failure occurred in the supply chain. If your chosen vendors fail to adhere to industry-specific regulations, your organization bears the ultimate responsibility. 
• Operational Disruptions: Vendor reliability is essential. An outage or service degradation at a third-party provider can bring your business to a halt, leading to financial losses and frustrated customers.
• Reputational Damage: Regardless of who was at fault, customers and the public often associate the breach with the primary service provider. It will be up to you to notify your customers and repair the damage caused to them. 

Why Traditional Security Falls Short

Traditional security models are inadequate for security in a complex third-party network, in part because you can only control YOUR security. As third-parties access internal systems and data, your security perimeter becomes more porous. 

Perimeter-based security measures don’t offer the level of granularity needed to manage access, which can lead to privilege creep. And, without the ability to monitor and track third-party activity on your network, malicious activity can go undetected and unaddressed.  

How Identity Security Protects Insurance Carriers

An Identity-First strategy fundamentally redefines how insurance carriers secure their digital assets and manage third-party relationships. It moves beyond the outdated notion of a secure perimeter to a model where every access attempt, regardless of its origin, is rigorously authenticated and authorized. This paradigm shift is built upon several core principles:

• Zero Trust: The principle of "never trust, always verify" is at the heart of identity security. Zero Trust means no user, device, or application is implicitly trusted, whether internal or external. 
• Least Privilege: The Least Privilege principle dictates that all users, including third parties, should be granted only the absolute minimum access necessary to perform their specific job or function. Enforcing least privilege will help insurance carriers drastically reduce the potential blast radius of a third-party compromise. by limiting what an attacker can access or manipulate.
• Continuous Authentication & Authorization: Robust identity security demands continuous verification. With IAM, identity and access rights are re-evaluated throughout a session, monitoring for unusual activity, device changes, or new locations and adapting to changes in context to ensure ongoing security and compliance.

An Identity Fabric to Protect Insurance Carriers

From access control to monitoring and mitigation, IAM is a broad discipline with deep capabilities to secure critical data from the frontlines – your users. 

• Centralized Identity Management: This establishes a single, authoritative source for all third-party identities. By centralizing identity data, insurance carriers can streamline the entire lifecycle of third-party access, from efficient onboarding that provisions necessary permissions, to rapid and complete offboarding when relationships change, ensuring no lingering unauthorized access.
• Strong Authentication: is non-negotiable for all third-party access. Multi-Factor Authentication (MFA) adds layers of security beyond just a password. Adaptive MFA takes this a step further, dynamically adjusting authentication requirements based on the context of an access attempt.
• Granular Access Control allows insurance carriers to define highly specific roles and permissions for each third party, ensuring they can only access the data and systems required for their tasks. Role-Based Access Controls (RBAC) define access based on roles, Account-Based Access Controls(ABAC) offer even greater granularity by factoring in attributes of the user, resource, and environment.
• Privileged Access Management (PAM): Third parties may require access to highly sensitive or administrative accounts. PAM solutions are crucial for managing these accounts, with capabilities like just-in-time (JIT) access and session recording for audit trails.
• Identity Governance & Administration (IGA): IGA provides the oversight and automation necessary to manage identities and access rights at scale, streamlining access requests and approvals through automated workflows and providing auditing and reporting capabilities for regulatory compliance.
• API Security & Microservices Architecture: Today’s insurance carriers rely on APIs for data exchange with third parties. IAM ensures that every API call and every interaction with these cloud-based services is properly authenticated and authorized, preventing unauthorized data access or manipulation within these critical networks.

Protecting The Organizations That Protect Us

Insurance carriers have an important role to play in society. Identity security offers profound advantages for insurance carriers, significantly enhancing security, reducing risk, and enabling a proactive defense against cyber threats. With robust identity governance, insurance companies can improve regulatory compliance, reduce operational overhead, and build a reputation for trustworthiness, transparency, and innovation. 

IAM is an essential tool for protecting your sensitive data and ensuring business continuity. To learn more about how KeyData Cyber helps insurance carriers, contact us today for a complimentary assessment of your organization’s security posture.