Data protection for the insurance industry: 7 best practices
Insurance has always been built on trust. Clients hand over some of the most sensitive information imaginable - medical history, financial details, family background - and they expect that data to be protected without compromise. Yet, in a landscape where cyberattacks are escalating and regulators continue to sharpen compliance demands, the margin for error has all but disappeared. Insurers who fail to safeguard personal data risk not only financial penalties but also irreparable damage to their reputation. That’s why understanding and embedding best practices for data protection is no longer optional - it’s essential.
Why is data protection essential for insurers?
Insurers manage data at an extraordinary scale. Claims forms, digital onboarding systems, automated underwriting, even telematics - every layer of the process generates new records. Not only is this data highly valuable to cybercriminals, but losing control of it could mean breaches of confidentiality and regulatory non-compliance.
It’s worth pausing here: protecting customer data isn’t only about avoiding fines. It’s about preserving the credibility of the insurance model itself. Without trust, policies become worthless promises. That’s why Pimloc, through its Secure Redact platform, emphasises data protection not as a defensive measure but as the foundation of sustainable insurance services.
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What threats do insurers face today?
The insurance industry has become an attractive target for attackers. Ransomware, phishing campaigns, insider misuse, and third-party vulnerabilities all pose significant risks. And unlike retail or entertainment firms, insurers often hold information that is permanent - your date of birth, your medical history, your biometrics.
This permanence matters. While a stolen credit card can be cancelled, compromised medical records can shadow an individual for life. Insurers must therefore approach security not as a tick-box compliance exercise but as a constantly evolving practice.
And that brings us to the central question: what works? What concrete steps can insurers adopt to reduce risk while still enabling digital innovation?
Best practice 1: Encrypt data at every stage
Encryption is hardly a new concept, but its consistent application across the entire data lifecycle often falls short. At rest, in transit, and during processing - every stage must be protected. Not only is encryption mandated by many regulatory frameworks, but it also provides a strong deterrent. Even if attackers gain access, encrypted data is far harder to exploit.
Best practice 2: Implement strong access controls
Too often, breaches happen not because systems were technically weak, but because access rights were poorly managed. Insurance companies employ thousands of staff and work with countless brokers and partners. Limiting data access strictly to those who require it reduces exposure dramatically. Role-based access, multifactor authentication, and regular audits should be routine, not exceptional.
Best practice 3: Prioritise vendor and third-party security
An insurer’s security posture is only as strong as its weakest partner. Claims processing, IT outsourcing, marketing automation - all involve external providers. That means third-party risk assessments must be integrated into procurement and ongoing oversight. Ignoring vendor vulnerabilities is a mistake that has cost the industry dearly in the past.
Best practice 4: Embed secure redaction tools
Sometimes compliance isn’t just about storage but about how data is shared and displayed. Sensitive information often has to be exchanged between adjusters, reinsurers, or legal teams. This is where Secure Redact from Pimloc becomes pivotal. By automating anonymisation and redaction, insurers can ensure that only the information necessary for a task is visible. It’s an approach that directly supports safeguarding client policies and data while reducing the chances of accidental disclosure.
Best practice 5: Train staff continuously
Technology handles a lot, but people remain the frontline defenders. Social engineering attacks are sophisticated, and employees without proper awareness can easily be manipulated. Regular training programmes, phishing simulations, and clear reporting lines strengthen human resilience. And because threats evolve, training cannot be a one-off initiative - it has to be continuous.
Best practice 6: Build robust incident response plans
Even the best-prepared organisations face breaches. What separates resilient insurers from vulnerable ones is the ability to respond quickly. Detailed incident response plans - covering detection, containment, communication, and recovery - can mean the difference between minor disruption and catastrophic loss. And just having the plan isn’t enough; it has to be tested through drills and revised regularly.
Best practice 7: Adopt a data minimisation mindset
The instinct to collect as much information as possible often backfires. Every unnecessary data field collected is another liability if breached. Minimisation - gathering only what’s essential - reduces both storage costs and exposure. It also aligns with global regulatory principles, such as GDPR’s requirement for data limitation.
Linking data protection to wider organisational goals
What stands out is that these best practices aren’t isolated IT tasks - they connect directly to business resilience. Strong encryption enhances client trust. Access controls demonstrate regulatory compliance. Incident response readiness reassures shareholders and customers alike.
In other words, data protection is both a legal necessity and a strategic differentiator. Insurers who integrate security into their broader corporate strategy gain a competitive advantage.
The bottom line
Insurance thrives on trust, and trust depends on data security. Not only is the threat landscape more hostile than ever, but the regulatory burden has also intensified. That combination leaves insurers with little choice but to harden their practices.
The seven best practices outlined - encryption, access control, third-party oversight, secure redaction, staff training, incident planning, and minimisation - are not luxuries. They are essentials. Some may argue that implementing them slows business processes, but the alternative is far worse: breaches, penalties, and reputational collapse.
Pimloc’s Secure Redact offers one route forward, showing how insurers can balance compliance with operational efficiency. Ultimately, success in the insurance industry will belong to those who treat data protection not as an obstacle, but as the cornerstone of sustainable, trustworthy service.