Recent Security Breaches Heighten Priority of IT Security
Nearly a million Nationwide customers' personal information was compromised, but the fact that businesses report that cyber risk is their biggest concern shows that hackers present both threat and opportunity to the financial services industry.
[For more on the September cyber attacks on major banks and related issues, see 10 Financial Services Cyber Security Trends for 2013 .]
Nationwide has acknowledged that the breach affected people in all 50 states, and several state departments of insurance have issued releases based on the insurer's notification, including Georgia, South Carolina and Iowa during the last two weeks. Last Thursday, the California Insurance Commissioner, Dave Jones, announced that his office would conduct a review of the Nationwide/Allied Group of insurance companies to ensure that the company was doing all it could to protect consumers from theft or loss of personal information. The release noted:
At this point [the California Department of Insurance] is satisfied the company is taking appropriate first steps to notify consumers whose information was accessed and providing assistance, including offering credit monitoring and identity theft protection for those impacted with $1 million in free identity theft insurance coverage with no deductible.
Identity fraud and identify theft are a large and growing problem in the financial services and data breaches of insurance company policyholder information only exacerbates the problem, notes Stephen Applebaum, a Chicago-based senior analyst with Aite Group's P&C insurance practice.
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