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Reducing risk for Insurance industry digital transformation.

Cristie Software work with many insurance industry firms to provide system recovery and migration solutions to support disaster recovery and aid the move towards full digitalization. 2024 marks a period of significant change for the insurance industry with digital transformation and cyber resilience a key focus. Regulations such as DORA and NIS2 within the EU and similar Operational Resilience directives from the Bank of England require firms to overhaul their cyber resilience with full compliance by 2025. In the UK the Lloyds Blueprint Two initiative is driving digital transformation with all firms required to use phase one digital services from 1 July 2024.

Supporting the transition from legacy systems.

To remain competitive many firms are aiming to migrate legacy systems which may be up to 30 years old to new digital cloud-based platforms. This is necessary to remain relevant alongside the many Insurtech startups who have fully embraced a personalised digital experience and are rapidly acquiring market share. Legacy systems present maintenance challenges due to end-of-life components which often incur high support costs. Cristie Software system migration tools offer extensive support for legacy operating platforms and can assist the migration from physical systems to virtual or cloud-based targets. Once a replica has been made within a new modern operating environment, applications can be fully tested for compatibility before any cut-over is made.

Digitalization and operational resilience in the insurance sector, two potentially opposing forces.

The cloud comes with many advantages, but it is not without risk. Exposing digital services to the public internet serves to increase the attack surface for any firm. As AI technologies progress rapidly, attackers will gain the ability to develop larger-scale phishing and disinformation campaigns that are even more convincing. These threat actors will increasingly focus on targeting cloud environments to establish persistence and navigate between different segments of victim environments hosted across multiple clouds. Firms should consider hybrid solutions combining public and private cloud architectures to provide resilience and security. Private cloud solutions may also be vital where data sovereignty is important for regulatory compliance. Cristie Software system recovery and replication solutions offer the ability to recover systems in any direction between physical, virtual and cloud platforms, or set in place local replication targets that can offer fail-over in the event of a cloud service outage.

What does the Lloyds Blueprint Two initiative mean to insurance firms in 2024?

The Lloyds Blueprint Two initiative in partnership with Velonetic is delivering a new digital platform transforming the journey of placing risk and making claims for open market and delegated authority business for both brokers and insurers. Blueprint Two digital services will be delivered in two phases. From 1 July 2024, all market firms must use phase one digital services. By April 2025, the launch of phase two digital processing services will take place, marking a significant milestone for the market as it transitions into a completely digital environment. This transition will be further facilitated with the implementation of the Digital Gateway risk service, also scheduled to go live in April 2025. Once operational, both these initiatives will enable the market to fully support digital placement of risk, providing the necessary capabilities to operate in an entirely digital setting.

How are compliance regulations impacting insurance firms in 2024?

The Digital Operational Resilience Act (DORA) was finalized by EU authorities in November and is set to take effect from January 2025. DORA primarily focuses on financial firms including insurance companies. Furthermore, certain “critical” third-party Information Communication Technology (ICT) service providers will also be directly subject to some provisions of DORA. Any ICT service providers working with the financial sector can also expect to comply with regulatory requirements. DORA aims to enhance the resilience of businesses against technology-related risks, including disruptions to operations and data breaches caused by cybercriminals.
Additionally, organizations operating in various sectors should carefully assess the applicability of the upcoming EU Network and Information Security Directive (NIS2) which became effective in January. All EU member states have until October 17, 2024, to incorporate it into their national frameworks. NIS2 strengthens the existing cybersecurity requirements faced by organizations covered under the original NIS Directive. Many organizations that were previously not subject to these rules will now find themselves bound by the new regulations. These regulations emphasize board-level governance of cyber risk and the need for adequate cybersecurity standards across the supply chain. This applies even to organizations based in the UK.

How can Cristie Software help meet compliance directives?

Cristie Software provides system recovery solutions designed for automated system recovery orchestration for both physical and virtual machines with the ability to undertake detailed system recovery simulations to assist with regulatory compliance. Cristie’s system recovery software can create fully functional copies of production systems within an isolated sandbox environment in minutes without the need for additional infrastructure. These sandboxes are easily accessible for multi-disciplinary teams to optimize workflows, validate change management procedures, and collect evidence of cybersecurity capabilities or weaknesses.

In Summary

System recovery can present challenges for insurance firms with physical systems often lacking the automation features that are taken for granted within virtual environments. Cristie recovery solutions can help overcome these limitations while providing complete flexibility to restore to and from any platform environment. Very often firms place disproportionate investment in cyber detection and prevention tools neglecting the last line of defense which is reliable system recovery. Cyberattacks are unfortunately an inevitability since many attack methods will gain access to user credentials. Contact our team to learn more about simplifying key aspects of infrastructure recovery, legacy system migration, and cyber resilience to meet the requirements of current operational resilience legislations.

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