EY Report : Cyber strategy for insurers
Innovative, global technologies are disrupting the traditional infrastructure of the insurance industry. Mobile, digital, analytics and payment platforms are accelerating rapidly. The evolution is so pervasive that the C-suite is seeking new business models to enable a stronger customer-centric focus.New models will drive growth expansively across geographical, operational and technical platforms to reach customers and meet their evolving needs. This will require new capabilities, expansion into areas such as governance and cyber risk, and a shift in oversight and responsibilities across the organization.
The EY Blockchain technology as a platform for digitalization emphasizes the importance that insurance companies are placing on creating a secure, common infrastructure for the digital economy. It highlights the need for resilience and attribution to secure the integrity and intimacy chain between client and insurer.
In the second of our EY Innovation series, we focus on managing critical assets and the changing boundaries between client and insurer within the context of cyber risk. We predominantly focus on issues that will confront the C-suite and assess the impact on the organization, including shifting C-suite responsibilities and changes of behavior resulting from operational processes and greater use of third-party providers. We explore increasing risk exposures, and how brand and reputation can erode when insurers fail to develop an operating model framework or understand data types and flows. Any breach of the client-insurer relationship that dilutes the customer experience or, worse, causes a loss of data leads to legal disputes or regulatory fines. There is increasing pressure on insurance companies to comply with regulatory requirements and European Union security and breach regulations.
As innovation and digitization evolves, insurers need to interpret management’s challenges by asking these fundamental questions:
- How do you identify and protect customer assets, particularly in a world that continues to digitize?
- What are the weaknesses and sources of disruption in your operating model, particularly with respect to third parties?
- Do you understand the risk appetite and risk culture needed to protect your brand?
- What is the impact to your organization, including changes to behavior and responsibilities of the C-suite?
- What is on your compliance agenda and your response to regulatory requirements?
Optimizing a framework to respond to technological opportunities, risks and disruption will protect brand and reputation, enhance investor confidence and prepare insurers for the challenges of tomorrow.
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