The insurance technology industry, also known as InsurTech, relies on software to power digital insurance platforms, process claims, manage policyholder data, and detect fraud. As insurers embrace digital technologies like automation, cloud computing, and AI-driven risk assessment, they also face growing cybersecurity threats, regulatory scrutiny, and vulnerabilities introduced by third-party software components. Addressing these risks proactively is essential to protecting customer data, maintaining compliance, and ensuring the resilience of insurance applications.

In this blog, we’ll explore the security challenges faced by InsurTech companies, the importance of application security, and how SOOS helps mitigate risks while simplifying compliance efforts.

InsurTech Software Security Challenges

InsurTech companies operate in a highly regulated and competitive space, where any lapse in security can have serious consequences. Because insurance technology deals with vast amounts of personally identifiable information (PII), financial records, and proprietary algorithms, InsurTech companies can be particularly vulnerable to cyber incidents. Key InsurTech software and business risks include:

• Data Breaches: InsurTech platforms store sensitive policyholder information, including Social Security numbers, health data, and banking details. This makes insurance and insurance technology companies prime targets for cyber incidents, as a breach could lead to identity theft and fraud, which could lead to significant business damage including loss of customer trust, regulatory fines, and more.
• Fraud Exploits: Weak software security in claims processing and underwriting systems can be exploited by cybercriminals, leading to payouts and financial losses, among other major business risks.
• Regulatory Violations: InsurTech companies must comply with regulations such as GDPR, PCI DSS, and state-level insurance data protection laws. Non-compliance can result in legal action and reputational damage.
• Third-Party Risk: InsurTech applications often integrate with external services like credit software, payment processors, and underwriting APIs. Vulnerabilities in third-party software can introduce significant security risks.
• Maintaining Customer Trust: Trust is the foundation of the insurance industry and consumers are increasingly aware of the impact of cyber incidents. Sixty-six percent of US consumers would not trust a company that falls victim to a data breach A security breach can lead to customers losing confidence in a company’s ability to protect their personal information, causing revenue loss and long-term reputational damage.
• Financial Losses and Lawsuits: A cyberattack or data breach can result in significant financial losses, either from the direct costs of the attack (such as paying for ransom or remediation) or from lawsuits and penalties.

Best Practices for InsurTech Software Security

InsurTech companies can strengthen their security posture by embedding security into their software development lifecycle (SDLC). Key areas to prioritize include:

1. Secure Software Development Lifecycle (SDLC)

Incorporating security at every development stage reduces the risk of vulnerabilities being introduced into production.

• Why it’s important: Fixing security issues earlier in development is more efficient and cost-effective than addressing them post-deployment.
• Example: An InsurTech team conducting threat modeling can identify potential fraud vectors and security loopholes early in the software development process.

2. Data Encryption and Protection

Customer and policyholder data must be encrypted both in transit and at rest to prevent unauthorized access.

• Why it’s important: Encrypting sensitive data ensures that even if a breach occurs, the stolen data remains unreadable.
• Example: Using AES-256 encryption for stored policyholder records and TLS 1.3 for secure transmission between APIs prevents data leaks.

3. Vulnerability and Patch Management

Regular security assessments and timely patching help prevent exploits that could compromise systems.

• Why it’s important: Attackers often target outdated software with known vulnerabilities.
• Example: Running regular or continuous automated vulnerability scans and immediately patching high-risk issues reduces exposure to cyber threats.

4. Third-Party Component Management

InsurTech applications rely on third-party libraries and APIs, which must be continuously monitored for security risks.

• Why it’s important: A vulnerability in an external component can provide an entry point for attackers.
• Example: A team using software composition analysis (SCA) tools can quickly find and fix vulnerabilities in third-party dependencies before they impact production systems.

5. Regulatory Compliance

Maintaining compliance with data protection and cybersecurity regulations is essential for operating legally and earning customer trust.

• Why it’s important: Insurance regulators impose strict requirements on data handling and breach notification.
• Example: An InsurTech company using automated compliance reporting can quickly generate audit-ready documentation for GDPR or PCI DSS inquiries.

The Role of Application Security in InsurTech

Application security is a core component of InsurTech cybersecurity. It ensures that the software applications used in insurance systems are secure from cyber threats. Here’s how application security helps InsurTech companies reduce risk, protect their business, and keep their customers’ data safe:

1. Proactive Threat Prevention: Application security helps identify and mitigate risks during the development phase, before vulnerabilities can be exploited.
2. Securing Personal Data: Proper application security ensures that personal data is encrypted, authenticated, and protected from unauthorized access.
3. Automated Vulnerability Detection: With automated security tools, vulnerabilities in code, dependencies, and third-party components can be detected and remediated quickly, minimizing the risk of a breach.
4. Compliance Enablement: Secure applications simplify the process of achieving compliance with industry standards by providing comprehensive security measures and detailed audit logs.

How SOOS Helps InsurTech Companies

SOOS provides a comprehensive and easy-to-use application security platform that’s tailored for regulated industries like InsurTech. Here’s how SOOS helps InsurTech companies strengthen their software security:

1. Software Composition Analysis (SCA)

SOOS scans third-party libraries and open source dependencies to detect vulnerabilities, misconfigurations, and licensing risks, ensuring InsurTech applications remain secure and compliant.

2. CI/CD Pipeline Integration

With SOOS’s seamless integration into CI/CD pipelines, security testing can occur continuously and in real-time as software is written. This makes it easy for teams to see issues right away, while they can be easily fixed and before they can cause business damage.

3. Automated Vulnerability Management

SOOS prioritizes security risks based on impact and exposure, as well as business-specific rules, enabling teams to focus on the most critical threats while automating ticketing workflows and suggesting remediation steps.

4. Regulatory Support and Compliance Assistance

SOOS simplifies compliance with regulations like GDPR, PCI DSS, and state insurance cybersecurity laws by providing real-time security assessments, automated compliance reports, and detailed audit logs with historical security snapshots.

5. Scalable and Cost-Effective Security

SOOS offers flat-rate pricing based on team size with unlimited scanning for all, allowing InsurTech companies to scan as often as needed without unexpected costs. This ensures security efforts can scale with business growth and reduces mental burden on teams as they can set up scans to run automatically without having to think about them.

Make InsurTech Software Security Doable, Not Daunting

As InsurTech companies continue to innovate, they must prioritize software security to protect sensitive data, comply with regulations, and maintain customer trust. Implementing strong application security practices, from secure coding to vulnerability management, is key to achieving this. Software security doesn’t have to be overwhelming. With SOOS, InsurTech companies can protect their customers and company while staying focused on other areas of their business.SOOS offers a comprehensive, easy-to-use, and cost-effective application security platform for InsurTech software security, making it the ideal platform for InsurTech organizations to enhance their cybersecurity without consuming significant team resources. In addition, SOOS helps InsurTech companies secure both their own and third-party software. It centralizes security management, enabling teams to run automated scans and address issues within their existing development tools. To learn more about how SOOS can help your company strengthen software security while keeping development efficient, contact us. Or start a free trial now.