By John Hilton
InsuranceNewsNet April 3, 2019
A recent survey by
Deloitte found that cybersecurity is the No. 1 concern of financial services
companies. Firms across the industry are making data security a top spending
priority.
Given the stakes,
it only makes sense that LIMRA/LOMA would get involved and take a leadership
role on data protection. Paul Henry, client relationship director for
LIMRA/LOMA, has been working on a fraud prevention program for several months.
"Fraudsters
tend to be opportunistic and every time you read about a hack into somebody's
database, it probably means there’s going to be a new set of fraudsters taking
that information and going out and trying to find a way in," he explained.
"What we are seeing is that the industry is doing a really good job
putting defenses in place."
In an effort to
forge a coordinated strategy against fraud networks, LIMRA hosted its first
Fraud Symposium in October during its annual conference. Since then, 10
companies have signed on to the effort to create a fraud-prevention prototype,
Henry said.
Today's 2019 Life
Insurance Conference agenda includes a session on identifying and avoiding
fraud. Henry, who is doing a separate presentation for the 2019 Retirement
Industry Conference, which begins later today, said the 10 companies are enough
for the association to move forward with "beta testing" on its
fraud-prevention program.
"Getting
compliance and legal professionals on the same page isn’t necessarily the
easiest thing," he added. "We probably have another two dozen
companies who have said to us, ‘When it’s ready, we want to sign up.’"
Two-thirds of
respondents (67 percent) to the Deloitte survey named cybersecurity as one of
the three risks that would most increase in importance for their business over
the next two years, far more than for any other risk. Yet, only about half of
the respondents felt their institutions were extremely or very effective in
managing this risk.
When a data breach
occurs, the stakes are high. For example, fraud costs to consumers from account
takeover is estimated at $5 billion.
Cybersecurity
regulations are likely to increase in the future, analysts have said. That is
just another reason for the industry to tackle the problem on its own as much
as it can, Henry said.
Customers might
have to assume some responsibility as well, he said.
"I foresee
more financial services asking their customers to take preventative steps of
their own," Henry said. "Right now, it’s the institutions who are
doing all the heavy lifting. I wouldn’t be surprised if companies were to ask
the customers to take more proactive steps to take care of themselves."
InsuranceNewsNet
Senior Editor John Hilton has covered business and other beats in more than 20
years of daily journalism. John may be reached at john.hilton@innfeedback.com.
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