Safeguarding Client Info Is
Life-Or-Death Issue For Agencies
BY MARK E. RUQUET
CLIENT INFORMATION is the most valuable commodity the insurance industry has in its
possession—and protection of that
precious resource in the age of electronic transactions is imperative to
the industry’s growth and survival.
“If the industry does not do a
good job of protecting information,
then it will blow all that we are
doing with modernization and real-time technology out of the water,” says Jeff
Yates, CEO of the Agents Council for Technology. “Customer privacy and security
must be a major [focus] of the industry.”
modern and legacy systems.
The challenge is keeping the systems
secure and free of intrusion from viruses
or hacking—thereby enabling the carrier’s
underwriters a wealth of data to
better judge the writing of risks
while protecting the client’s personal information.
“No insurer wants a data spill,”
says Frank Petersmark, chief information officer advocate with X by 2 Inc.,
a technology-consulting company.
“The last thing you want to see is
your name in the Wall Street Journal.”
If the industry does not do a
good job of protecting information,
then it will blow all that we are
doing with modernization and real-time technology out of the water.”
Jeff Yates, chief executive officer
of the Agents Council for Technology
To help make sure the industry recognizes data security as a top priority, insurance regulators are stepping in. Massachusetts, for example, has adopted some very
strong and specific privacy regulations
that agents there need to be well versed in.
And federal laws require companies
to spell out their privacy rules and notify
customers of any breech.
Carriers, too, are “getting agents’ attention” with errors and omissions coverage, notes Yates. To obtain E&O coverage,
producers must have a concrete plan in
place to protect client data.
Insurers are also mindful of the need
to protect personal information while
mining it for business-advancing data.
Carriers want to leverage the information they’ve collected over the years and
have built electronic gateways that allow transmission of information between
PROTECTIVE STEPS
For agents looking for solutions to the data-protection question, one answer is cloud
computing, says Petersmark.
In a cloud-computing situation,
the information-storing servers are
no longer housed in the agent’s office. Instead, they are administered
offsite, removing much expense and
data-security administration from
agents and carriers.
But Doug Johnston, vice president of partner relations and product
innovation with insurance-industry
software provider Applied Systems
There are a burgeoning number of
service providers, raising questions
about how data is handled and what
the plans are for it.
“Where is the data going, and do you
have an agreement with all of those you
are doing transactions with to keep that
data secure?” asks Johnston. “There is a
whole movement of data that no one is
thinking about.”
Johnston says agents are most respon-
sible for the data’s security because they
collect and transmit it. They have to stop
doing business as usual and be more aware
of the potential liabilities.
He recommends that agents read and
understand the license agreements to ensure
clients’ data is secure and not shared. NU
Social Media And Security
ONE EMERGING security concern is the growth of social media to communicate with clients.
Experts say these types of interactions
should always be general in nature and not
involve personal information.
“A discussion about insurance should always
be secured, either by a personal phone call or
other secure communication,” says Jeff Yates,
CEO of the Agents Council for Technology.
Doug Johnston, vice president of partner rela-
tions and product innovation with software-provider
Applied Systems Inc., warns there is always someone
trying to steal a client’s information.
