The article reveals why cybersecurity has become insurers’ newest existential risk and how SOC 2 Type 2–certified
InsurTech mitigates it. It outlines 2024’s threat spike—18 % of all global cyber-incidents, $12.5 billion in
losses—and shows how interconnected claims APIs and third-party tools create the biggest breach vector. A
real-world case (the Change Healthcare hack) illustrates the fallout when MFA and zero-trust controls are missing.
To move from risk to assurance, carriers must adopt platforms audited for continuous security. Claims Letters
achieved SOC 2 Type 2 in Feb 2025, proving its encryption, access-control, and monitoring safeguards work in
production. With that certification—and features like Product ID routing, policy-document insertion, and
Generative AI—Claims Letters lets claims teams modernise communications while keeping sensitive data fully
protected and compliant.
Insurance was built on the foundation of risk prevention—yet today, insurers themselves are becoming some of the
biggest targets for cyber threats. In 2024, the Finance & Insurance sector faced the second-highest number of
cyberattacks, accounting for 18.2% of all global incidents (IBM, 2024). Meanwhile, FBI data reveals that
cybercrime losses surged to $12.5 billion in 2024—a 22% increase from the previous year.
With insurers handling some of the most sensitive financial and personal data, decision-makers cannot afford to
overlook security when evaluating InsurTech solutions.
Insurance at Risk: The Growing Cybersecurity Challenge
Security is critical in the insurance industry due to this industry’s handling of highly sensitive personal,
financial, and medical data, making it a prime target for cyberattacks. Unlike industries that handle basic
customer data, insurers store:
Social Security Numbers & Tax IDs
Banking & Payment Information
Medical History & Health Records
Employment & Risk Assessment Data
Legal & Liability Documents
A breach in any of these categories exposes individuals to fraud, identity theft, and financial
loss, making insurance a prime target for cybercriminals.
In 2024, the Change Healthcare breach underscored this risk when cybercriminals exploited a
remote access vulnerability, exposing personal health and insurance data from over 100 million
individuals—one of the largest healthcare-related cyberattacks in history. The breach, which was traced
back to a failure to enforce multifactor authentication on critical systems, disrupted claims
processing nationwide and triggered regulatory scrutiny and financial fallout for insurers
relying on the compromised system.
This breach underscores a broader trend: insurance fraud is a multi-billion-dollar issue, and
cybercriminals are increasingly exploiting security gaps in interconnected digital ecosystems to
commit fraud at scale.
Where Insurance Systems Face the Greatest Threats
In the Digital Age, insurers rely on highly interconnected systems to streamline claims
processing, integrate InsurTech solutions, and ensure operational efficiency—but this interconnectivity also
expands their attack surface and security risks.
Claims ecosystems involve multiple data exchanges between policy management platforms, third-party adjusters,
reinsurers, payment processors, and regulatory systems, often facilitated by APIs and cloud
integrations. While these connections improve speed and automation, they also introduce
vulnerabilities, as 65% of breaches in the insurance sector originate from third-party integrations or API
security gaps (Ponemon Institute, 2023).
A single weak link—such as misconfigured cloud storage, unencrypted claims data, or an insecure API
endpoint—can expose policyholder information, claims history, and financial records to
cybercriminals.
To mitigate these threats, insurers must adopt a zero-trust architecture, implement
end-to-end encryption across claims workflows, and enforce continuous monitoring of all
third-party access points, ensuring that efficiency doesn’t come at the cost of security.
From Risk to Assurance: The Importance of a SOC 2-Compliant InsurTech Ecosystem
In an industry where claims processing, policy management, and third-party integrations rely on interconnected
systems, security gaps can expose insurers to breaches, fraud, and regulatory penalties.
A SOC 2-certified InsurTech ecosystem guarantees that every component of the claims and
policy lifecycle meets the highest security, encryption, and access control standards.
The SOC 2 Certification guarantees that all cloud-based, software-driven
workflows are continuously monitored, rigorously tested, and securely structured to
prevent unauthorized access. It furthermore aligns with HIPAA, GLBA, and GDPR mandates, ensuring
that claims data, underwriting records, and payment transactions remain confidential, auditable, and
protected against cyber threats.
Without a SOC 2 framework, insurers risk introducing unverified InsurTech tools
into their architecture, potentially compromising sensitive policyholder data and weakening
regulatory compliance efforts. By embedding SOC 2-certified solutions, insurers
not only fortify their security posture but also ensure that their digital transformation
efforts remain scalable, compliant, and resilient against evolving cyber risks.
Claims Letters Achieves SOC 2 Type 2 Compliance
In February 2025, Claims Letters, LLC achieved SOC 2 Type 2
Certification, reinforcing its position as a highest-standard security provider in the
InsurTech space. This certification ensures that Claims Letters meets rigorous industry safeguards for
data security, compliance, and operational reliability.
SOC 2: Type 1 vs. Type 2 – What’s the Difference?
SOC 2 Type 1: A snapshot assessment of security controls at a single point in
time, ensuring policies and procedures are properly designed but not necessarily
tested for long-term effectiveness.
SOC 2 Type 2: A rigorous, months-long audit that verifies security measures
operate effectively over time, proving an organization’s continuous commitment
to data protection, risk management, and compliance.
When investing in technological innovation, SOC 2 Type 2 compliance should be a
non-negotiable standard, ensuring your InsurTech solutions are built for long-term resilience,
compliance, and trust.
With SOC 2 Type 2 compliance, Claims Letters delivers a best-in-class security
framework, ensuring insurers operate with the highest standards of data integrity, encryption,
and third-party risk management.
What Is Claims Letters?
Claims Letters was designed by insurance experts and claims technology specialists to make claims teams
fully autonomous in handling their communications—no coding, no complexity, just drag-and-drop simplicity
at its finest.
Every carrier has a unique approach to navigating the brave new world of insurance
technologies—that’s why we let you have it your way, whether that means a semi-automated process with
automated claim data and manual fill-in sections, or fully generated letters produced by AI based on your claim
notes.
With unique features like Product ID, Policy Document Insertion, and powerful
Generative AI, Claims Letters has become the trusted partner of adjusters and claims managers
alike. As a SaaS solution, Claims Letters integrates seamlessly with your core systems—whether you’re
running modern platforms or legacy systems like AS400s.
Training is fast and intuitive—there’s no need for special courses. New users will
find all of the documents and data needed for writing a claim letter available at their fingertips, making it the
ideal solution for onboarding new hires or TPAs, especially during CAT scenarios when speed and efficiency are
critical.
Want to see it in action? Schedule a demo or reach out to learn
more.
SOC 2 Type 2 certification proves that a technology partner meets rigorous standards for data protection,
monitoring, and access control. In claims handling—where sensitive policyholder information is constantly
exchanged—working with SOC 2–certified platforms like Claims Letters significantly reduces the risk of
breaches, ransomware, and regulatory fallout.
Insurers are increasingly targeted by cyberattacks. In 2024, the industry accounted for 18% of all global
cyber incidents, resulting in over $12.5 billion in losses. The biggest vulnerabilities are now found in
third-party tools, claims APIs, and legacy systems without adequate access controls or encryption.
Claims Letters is SOC 2 Type 2 certified, meaning its encryption, access controls, and activity
monitoring are tested and validated under live production conditions. The platform is built with
zero-trust principles and includes MFA enforcement, secure role-based access, and automated compliance
logging.
The Change Healthcare hack disrupted claims processing across the U.S. and cost insurers billions. It
exposed how fragile the ecosystem becomes when core vendors lack strong authentication and infrastructure
segmentation. Claims Letters is built to eliminate those weaknesses by prioritizing compliance-grade
security at every integration point.
Yes. Claims Letters is a modern SaaS platform that integrates cleanly with both modern and legacy core
systems—including AS400—via secure API connectors or automated batch processes, all under SOC 2-compliant
conditions.
No. Claims Letters is designed with adjusters in mind. It features a drag-and-drop interface and smart
automation to reduce onboarding time. Most users are proficient within a few days, and it significantly
shortens the ramp-up time for new hires and TPAs—especially valuable during CAT events.
Our platform includes a compliant generative AI assistant that drafts customized claim letters based on
internal claim notes. You can toggle between manual workflows, AI-assisted suggestions, or full
automation—all within SOC 2–controlled safeguards.
Absolutely. While Claims Letters now provides industry-leading security, it still delivers the same
regulatory precision—automatically applying the correct state-specific disclaimers through our Disclaimers
Catalog. This ensures you're compliant across all 50 states without managing hundreds of templates.
