Chapter 15 Role and Significance of Data Protection in Risk Management Practices in the Insurance Market

Introduction: The insurance industry is vulnerable to attacks as it deals with the personal information of its consumers and puts the insurance company’s business at risk in the event of data breach or abuse. To ensure the security of customer data, insurance companies must comply with various data protection requirements, including requirements imposed by laws, regulations, and standards. Following such a wide range of conditions can be challenging for insurance providers. For a long time, risk management has controlled data protection to ensure compliance with data protection law and ensure that data are processed correctly and that people’s fundamental rights are protected effectively. Purpose: This chapter explains the role and significance of risk management. An organised way to identify and assess risks, mitigate or avoid risks as much as possible, and then manage and accept the remaining risks, implemented in data protection as needed, explained by the supervisory authority, is implemented by the responsible organisation. This document highlights the growing consensus surrounding risk management as an essential tool for adequate data protection. Furthermore, it addresses vital considerations that affect the role of risk in data protection law and practice. Need for study: There is an increasing consensus towards the role and significance of risk management in data protection in the insurance market. As a result, regulators and legislators are focussing on valuable and new attention on standardising and expanding data protection in risk management practices. This paper has attempted to identify critical issues and principles of risk management in data protection. Methodology: Secondary data analysis was conducted in this study by reviewing literature related to data protection, risk management, and the insurance sector. Again, science direct was used as a source of information. For this study, the literature review approach was chosen since it allows us to trace the growth of the subject matter and identify the patterns that have formed through time. Findings: The insurance industry comprises general insurance and life insurance. It is found that there are various studies conducted on the privacy violation and data breaches of individuals in the insurance industry. The study also identifies the factors causing privacy issues and recommends improving data privacy management in the insurance market. Practical implications: The current study can be referred to by academicians, marketers, industry people, and policymakers. In addition, the study encourages companies and academicians to investigate further the process of data protection in the insurance industry.