The news: Last year, we covered predicted growth in specialized insurance, including cybersecurity protection, because of the rising costs of data breaches. Allianz Life’s recent incident is further proof why such protection and precautionary measures are imperative.

The details: A majority of personal customer data was stolen from Allianz Life during a cyberattack on a third-party cloud-based customer relationship management (CRM) system on July 16, per TechCrunch. Hackers used social engineering to gain access to the data, which included 1.4 million names along with social security numbers, birth dates, government-issued ID numbers, health-related information, and additional details that leave victims vulnerable to fraud and identity theft—which a few have allegedly already experienced. Some customers have filed a lawsuit against the life insurer for damages, per Scott + Scott Attorneys at Law.

Why this matters: As a result of this data breach, Allianz Life faces financial and reputational costs that could affect its bottom line for years. This is a powerful reminder for the entire insurance industry to strengthen its cybersecurity defenses. Preventing attacks requires a proactive and comprehensive strategy beyond simple perimeter defenses.

• Acquire cybersecurity insurance: Companies can protect themselves from the financial fallout of a breach with a strong cybersecurity insurance policy. This can cover data recovery costs, legal fees, and regulatory fines.
• Invest in human-centric security: Insurers must prioritize regular, interactive security training for all employees. It should focus on identifying and responding to social engineering tactics like phishing and pretexting.
• Implement advanced security technologies: Deploying advanced security solutions such as AI-driven threat detection and real-time response is crucial. Insurers should also prioritize data encryption for sensitive information to protect it in the event of a breach.