How cybersecurity is crucial to the insurance industry

In this guide

• Cybersecurity in insurance industry
• Insurance industry and risk
• Cybersecurity challenges
• Cybersecurity solutions
• Related resources
• Frequently asked questions

As of 2025, the U.S. insurance industry is leading the way in cybersecurity advancements and adjustments. The ongoing digital transformation in the sector has created new avenues for efficiency, convenience, and connectivity, but has also exposed the industry to more sophisticated cyber threats that require ongoing vigilance and adaptation.

For insurers, cybersecurity has shifted from a mere technical issue to a core business concern. The industry recognizes that safeguarding sensitive customer information, maintaining operational integrity, and adhering to changing regulations are essential for preserving trust and credibility in a fast-evolving environment.

The challenges, ranging from ransomware and vulnerabilities associated with artificial intelligence to the increasing dependence on third-party vendors, are varied and necessitate thorough strategies.

Related resources

• What is cybersecurity insurance and why do people need it
• Cybersecurity in critical industries
• Cybersecurity degrees in Connecticut — Guide to choosing a school
• Cybersecurity in the financial services industry
• Cybersecurity resource center

Cybersecurity within the insurance industry

Cybersecurity within the insurance industry is vital because of the industry’s size and scope and the vast amounts of data consumed by companies in this sector. We all need insurance of some type, usually more than one kind.

We are required to surrender contact information, financial information, and even health information to purchase insurance. Often, this information is requested before writing an insurance policy and may be given to multiple insurance companies as consumers shop around.

Digital Guardian, a provider of a data protection platform, published the results of a survey. In this survey, they asked 20 insurance industry security professionals to respond to a single question.

That question was, “What are the top security considerations for insurance companies and how to mitigate [them]?”

The blog post delineating Digital Guardians’ findings, by Juliana De Groot, is instructive because it offers the unique perspective of those who work in the industry.

It does not mean that these security professionals have all the answers to questions related to this sector, but it does show what they think their problems and solutions are.

Nearly every response discussed the importance of protecting the massive amounts of PII and other sensitive information they store.

There was universal agreement that the insurance industry must collect, store, and transmit all kinds of personal data about vast numbers of people, by the nature of their business.

The concerns about exposure to financial liability resulting from these vast databases include significant judgments in potential lawsuits by clients, fines from running afoul of regulatory agencies, and ransoms extracted by those wielding ransomware against their organization.

There was no clear favorite for these “keep you up at night” scenarios. All could potentially happen and would be equally devastating. There were four definite themes in the “what can be done about it” or the mitigation strategies category.

These respondents seem to understand that good technology does little good without a corresponding and equally effective policy. Technology alone will not provide adequate protection against most types of attacks. There are too many ways a policy can negate the value of technology.

Leaving a database exposed in the cloud because of an unclear policy will undermine any sophisticated access control or perimeter protection technology.

The next three mitigation measures seemed to weigh equally among the respondents. They are technology alone, policies alone, and user training.

The merits of technology alone or policy alone need not be discussed because they are inferior to technology and policy combined as a mitigation strategy. One can assume these respondents did not have time to articulate their entire opinion about mitigation and chose only their top approach.

User training was included in several responses and is worth noting because it is consistent with most cybersecurity research. Study after study confirms that most attacks depend on some form of social engineering.

A successful social engineering attack, or attack element, is almost always the result of inadequate user training. Cybercriminals depend on their ability to trick users into providing information that, combined with other accumulated information, provides the keys needed to launch an attack.

Cybersecurity within the insurance industry is much like that in other sectors. The same cyberattacks and techniques are deployed by criminals looking for much the same types of data, something they can sell or ransom for money.

It is a Big Data industry, and much of that data is sensitive information about people.

Case study

“SecureInsure,” a large national property and casualty insurance provider in the United States, is facing increasing pressure to enhance its cybersecurity posture in 2025. The company holds vast amounts of sensitive customer data, including financial information, health records, and personal identifiable information (PII), making it a prime target for cyberattacks.  

Challenges

1. Sophisticated AI-Powered Attacks: SecureInsure‘s security team is struggling to keep pace with the growing sophistication of AI-driven cyberattacks. Attackers are using AI to create highly convincing phishing emails, generate realistic deepfake audio and video to impersonate executives for BEC scams, and automate the discovery and exploitation of software vulnerabilities.  
2. Supply Chain Vulnerabilities: A recent security audit revealed that several of SecureInsure‘s third-party vendors, particularly those providing IT services and data analytics, have inadequate cybersecurity measures. This poses a significant risk of supply chain attacks, where a compromise of a vendor could provide a backdoor into SecureInsure‘s systems.
3. Ransomware-as-a-Service (RaaS): SecureInsure is experiencing a growing number of ransomware attacks, many of which are attributed to RaaS affiliates. These attacks are becoming increasingly sophisticated, often involving double extortion tactics (encrypting data and threatening to release it publicly) and triple extortion (adding denial-of-service attacks or targeting customers).
4. Evolving Regulatory Landscape: SecureInsure must comply with a complex and evolving regulatory landscape, including state-specific data privacy laws like CCPA and NYDFS cybersecurity regulations. The proposed federal Insure Cybersecurity Act of 2025 adds another layer of potential compliance requirements.
5. Talent Shortage: SecureInsure‘s cybersecurity team is facing a shortage of skilled professionals, making it difficult to effectively manage and respond to the increasing volume and complexity of cyber threats.

SecureInsure’s Response

1. Investing in AI-Powered Security Solutions: SecureInsure is implementing AI-powered security tools for threat detection and response, including machine learning-based anomaly detection systems and AI-driven phishing prevention solutions. They are also exploring the use of AI to automate security tasks and augment the capabilities of their security team.
2. Strengthening Vendor Risk Management: SecureInsure is overhauling its vendor risk management program. This includes conducting thorough security assessments of all vendors, implementing stricter contractual requirements for vendor cybersecurity practices, and providing cybersecurity training to vendor employees. They are also exploring options for cyber insurance that cover supply chain risks.  
3. Enhancing Ransomware Defenses and Incident Response: SecureInsure is implementing advanced endpoint detection and response (EDR) solutions, improving its backup and recovery processes with air-gapped backups, and conducting regular ransomware incident response simulations. They are also working with law enforcement and threat intelligence providers to stay informed about the latest ransomware tactics and threat actors.
4. Improving Compliance Posture: SecureInsure is investing in tools and training to ensure compliance with all relevant data privacy regulations. They are also actively monitoring the progress of the Insure Cybersecurity Act of 2025 and preparing to implement any new requirements.
5. Addressing the Talent Shortage: SecureInsure is implementing several strategies to address the cybersecurity talent shortage, including offering competitive salaries and benefits, investing in employee training and development, and partnering with universities and professional organizations to recruit and train new cybersecurity professionals.

Outcomes

1. Reduced Incident Rate: The implementation of AI-powered security solutions and enhanced ransomware defenses has significantly reduced the number of successful cyberattacks against SecureInsure.  
2. Improved Vendor Security: The strengthened vendor risk management program has led to a noticeable improvement in the cybersecurity posture of SecureInsure’s third-party vendors, reducing the risk of supply chain attacks.
3. Enhanced Regulatory Compliance: SecureInsure’s investment in compliance has ensured that the company is meeting all relevant regulatory requirements, minimizing the risk of fines and legal penalties.
4. Stronger Security Team: The strategies implemented to address the talent shortage have helped SecureInsure build a more robust and capable cybersecurity team.

Navigating the Shifting Sands of the Cyber Insurance Market

The cyber insurance market is undergoing significant changes due to the evolving threat landscape. Insurers are emphasizing thorough security assessments for policyholders, requiring measures like multi-factor authentication and incident response plans as prerequisites for coverage.

Rising premiums, constrained coverage, and stricter underwriting rules are pushing businesses to enhance their cybersecurity. Data privacy regulations are shaping policies, addressing claims beyond breaches to include misuse of personal data. Insurers are focusing on third-party risk management, demanding robust vendor agreements and security audits.

Artificial intelligence plays a dual role, offering opportunities for sophisticated risk assessment and fraud detection while posing cybersecurity challenges due to biases and ethical concerns. The market is adapting to novel risks like AI-related attacks and liability coverage for CISOs.

Regulatory agencies are influencing the sector with stricter data protection laws, increased SEC scrutiny on cybersecurity disclosures, and guidance on AI fairness and transparency. These shifts reflect the industry’s proactive response to complex risks and changing compliance demands.

What makes cybersecurity challenging within the insurance field?

The unique cybersecurity challenges faced by the insurance industry are interrelated and stem from the vast amount and varying types of sensitive data with which this sector deals.

It is also essential that insurers create and maintain trust relationships with their customers. Finding solutions to these challenges is critical for the health of the industry.

The nature of the insurance business dictates that the industry collects, processes, and analyzes massive amounts of structured and unstructured data.

Structured data is highly organized and formatted such that it is easily searchable in relational databases. It is programmatically correct and machine-readable. Examples of structured data used by insurers include name, address, vehicle information, medical history, dates, and claim history.

However, unstructured data has no predefined format or organization, making it more difficult to use and protect.

Unstructured data is information insurers collect in a human-readable format. It can be used to fine-tune what an insurer will or will not cover, spot indicators of fraud, and provide a customized customer experience.

This data comes from email, written reports, photographs, multimedia, social media, and data analytics. It can be data that needs to be preserved for legal purposes, intellectual property, and customer PII.

Traditional security tools and technologies used for the prevention of cyberattacks are not sufficient for many insurance businesses, particularly those that handle large volumes of unstructured data.

Insurance company staff in charge of data analysis often do not have the required knowledge to respond effectively to potential threats that may arise from the use of varying types of data.

Paramount to the success of an insurance company is its reputation. Nearly everyone needs insurance, but there are many insurance companies from which to choose.

A highly publicized cybersecurity breach of customer data can undermine an insurer’s reputation and have severe repercussions in the marketplace.

Cybersecurity solutions for the insurance industry

Research for cybersecurity solutions for protecting Big Data generally and the insurance industry specifically is advancing rapidly.

Large data sets, including financial and private data, are a tempting target for cyber attackers, and therefore, protection of these assets is the focus of many new protection solutions.

Employing artificial intelligence (AI) and machine learning (ML) can significantly help insurance companies protect against malware, ransomware, and advanced persistent threats (APT).

Because these new technologies can analyze large amounts of data quickly, they are well suited to solutions that can detect any deviation from an expected or prescribed pattern in data behavior. They can be used to monitor data workflows and respond to attacks immediately.

Big Data security solutions must offer real-time analysis and monitoring and be designed to avoid performance degradation, which leads to delays in data processing.

Conclusion

In summary, the cybersecurity landscape in the US insurance sector in 2025 is intricate and constantly changing. The continuous advancement of cyber threats, especially those driven by AI and ongoing weaknesses in supply chains, requires insurers to adopt a proactive and flexible strategy.

Additionally, the tightening of regulations and the ongoing challenge of attracting and keeping cybersecurity professionals place the industry at a pivotal moment.

The SecureInsure case study highlights the critical steps needed to effectively navigate the current cybersecurity landscape. Key actions include adopting advanced technologies such as AI-based security, carefully managing risks associated with third-party vendors, strengthening defenses against advanced ransomware threats, prioritizing adherence to regulations, and strategically tackling the talent shortage. These elements have become essential for a strong cybersecurity strategy.

Ultimately, the ability of US insurance companies to safeguard sensitive data, maintain operational resilience, and uphold the trust of their customers in 2025 and beyond will depend on their unwavering commitment to cybersecurity.

This requires a continuous cycle of assessment, investment, adaptation, and collaboration across the industry and with regulatory bodies to stay ahead of the ever-evolving threats and ensure a secure and stable future for the insurance sector.

Further Reading

• Privacy in the Age of Big Data: Recognizing Threats, Defending Your Rights, and Protecting Your Family
• Habeas Data: Privacy vs. the Rise of Surveillance Tech
• Cyber strategy for insurers: Managing physical and digital assets to protect brand and reputation

Frequently asked questions

Sources

• Top Security Considerations for Insurance Companies | From Digital Guardian in Apr 2025
• Structured vs Unstructured Data | Sourced from Datamation in Apr 2025
• How big data and AI work together | Sourced from Enterprisers Project in Apr 2025
• Secure Insure Information | Sourced from Secure Insure in Apr 2025
• Insure Cybersecurity Act of 2025 | Sourced from Congress.gov in Apr 2025