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💻 '''ICT risk''' refers to the potential for loss or disruption arising from failures in information and communication technology systems — a category of [[Definition:Operational risk | operational risk]] that has become a central concern for [[Definition:Insurance carrier | insurers]], [[Definition:Reinsurer | reinsurers]], and [[Definition:Insurance supervisor | insurance supervisors]] worldwide as the industry's dependence on digital infrastructure deepens. Unlike traditional operational hazards, ICT risk encompasses threats ranging from system outages and data corruption to [[Definition:Cyber risk | cyberattacks]], third-party technology provider failures, and inadequate change management during digital transformation programs. In the insurance sector, where real-time [[Definition:Policy administration system | policy administration]], [[Definition:Claims management | claims processing]], and [[Definition:Underwriting | underwriting]] decisions depend on interconnected platforms, even brief technology failures can trigger regulatory breaches, financial losses, and reputational damage.

🔧 Insurance regulators across major markets have introduced increasingly prescriptive frameworks to address ICT risk. The European Union's Digital Operational Resilience Act (DORA), which applies to insurers and reinsurers alongside banks and other financial entities, mandates comprehensive ICT risk management, incident reporting, resilience testing, and oversight of critical third-party technology providers. In Asia, regulators such as the [[Definition:Monetary Authority of Singapore (MAS) | Monetary Authority of Singapore]] and Hong Kong's [[Definition:Insurance Authority (IA) | Insurance Authority]] have issued technology risk management guidelines requiring insurers to maintain robust disaster recovery capabilities and conduct regular vulnerability assessments. Under [[Definition:Solvency II | Solvency II]], ICT risk falls within the broader [[Definition:Operational risk | operational risk]] charge, but supervisory review processes increasingly probe insurers' specific technology governance. Practically, managing ICT risk requires insurers to maintain inventories of critical systems, establish clear accountability for technology resilience, conduct scenario-based stress testing — including ransomware simulations — and implement contractual safeguards with [[Definition:Outsourcing | outsourcing]] partners and cloud service providers.

🛡️ The insurance industry's exposure to ICT risk carries a distinctive dimension: insurers are not only vulnerable to technology failures in their own operations but also [[Definition:Underwriting | underwrite]] ICT risk for others through [[Definition:Cyber insurance | cyber insurance]] products. This dual role means that a systemic technology event — such as a widespread cloud platform outage or a zero-day exploit affecting common enterprise software — could simultaneously disrupt an insurer's internal operations and trigger a surge in [[Definition:Insurance claim | claims]] from policyholders. Boards and senior management teams at insurance firms are therefore expected to treat ICT risk as a strategic issue, not merely a technical one. The growing reliance on [[Definition:Artificial intelligence (AI) | artificial intelligence]], [[Definition:Application programming interface (API) | APIs]], and [[Definition:Insurtech | insurtech]] partnerships further expands the attack surface, making continuous monitoring, governance, and investment in resilience capabilities an essential part of any insurer's [[Definition:Enterprise risk management (ERM) | enterprise risk management]] framework.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Cyber risk]]
* [[Definition:Operational risk]]
* [[Definition:Cyber insurance]]
* [[Definition:Outsourcing]]
* [[Definition:Enterprise risk management (ERM)]]
* [[Definition:Solvency II]]
{{Div col end}}

Definition:ICT risk - Revision history

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