Long-term trust is the foundation of life insurance. Customers provide extensive personal information—financial background, family status and retired life—often decades before they actually receive cash benefits. As life insurers look to modernize operations and shift their relationship with customers to an e-commerce model, trust in life insurers is based increasingly on invisible systems that the vast majority of policyholders will never experience.
To handle the scale of their business, many life insurers rely on cloud-based customer relationship management( (CRM) tools, vendors outside their organization and automated workflows. Such systems offer speed, personalisation and efficiency, however, centralising sensitive data into one location creates concentrated points of risk that did not exist when records were maintained in paper and hand-written formats.
The Allianz Life Data Breach, which was reported in the year 2025, proved how the exposure from a breach of customer data may come from the digital tools that are adjacent to the core of a life insurer's business. While this incident impacted a significant number of people, it is representative of a greater challenge that many life insurers face. That is, often, the pace of technological advancement is much faster than the development of oversight.
While banks operate under a transactional model, insurers view themselves as having a very long-term data retention remit. Data retained by Insurers is typically valuable much after it is first collected and may never lose any of its usefulness, such as policy records, beneficiary information, and financial identifiers. Therefore, the risk of losing critical data, especially data shared through third party systems, grows along with increasing data retention periods.
Insurers are at an increasing risk of threat from social engineering. Social engineering attacks occur when losses are sustained not through the exploitation of a system, as is common among more typical fraud or cyber attacks, but instead through manipulating an employee or contractor within the system's controls. As insurers develop remote workforces or utilize vendors to provide services, it becomes much more difficult to provide consistent security controls across multiple sites or locations.
A third challenge for insurers that have been using the same model to build a long-term data retention strategy is the fragmented regulatory environment in which they operate. States govern their own insurance laws providing various levels of reporting requirements and the application of oversight and compliance. The existence of such requirements does not mean that they are in alignment with the realities of a modern cloud infrastructure.
While consumers are affected by exposure, the impacts are rarely immediate. The consequences of fraud may not be discovered until months or years later, making it more challenging to verify and rectify fraudulent activity. Identity-related insurance data is not easily replaced, similar to a stolen credit card.
The upcoming evolution of the life insurance industry will rely on greater digital resiliency as well as an emphasis on financial security as all insurers continue to create digital channels of trust. In addition to being viewed as an afterthought in many cases, cybersecurity is quickly becoming a foundational element of every insurance company's ongoing operations.
