API Security for Insurance: Protecting Data and Claims Integrity

The insurance industry is rapidly digitizing, and APIs now drive core workflows across underwriting, claims, customer onboarding, policy servicing, and partner integrations. This shift has also expanded the attack surface. This shift has also expanded the attack surface, AppTrana tracked 495 million attacks on insurance websites and APIs in 2024, showing how cybercriminals have moved from random attempts to precise, automated campaigns. According to the Indusface’s State of Application Security API-targeted attacks increased by 104 percent in the first half of 2025, with over 78 percent targeting sensitive data and business logic.

For insurers, this is critical because API exchanges often include identity information, medical data, financial records, telematics behavior, and claim evidence, making them high-value targets for fraud and cybercrime.

Why API Risks Are Growing in the Insurance Industry

Insurance has become deeply API-dependent across all functional areas. Policy issuance relies on identity verification, eKYC, fraud scoring, underwriting engines, and document processing APIs. Claims journeys follow a multi-step sequence involving FNOL submissions, document extraction, repair/garage systems, assessor workflows, payment engines, and fraud detection systems. Each stage is powered by APIs that exchange regulated data, making them high-value attack surfaces.

Telematics- and IoT-driven insurance introduce continuous data flows from vehicles, wearables, home sensors, and mobile apps. These streams influence underwriting and claims decisions, making their authenticity critical. Any tampered or replayed data directly affects pricing fairness and liability determination.

Health insurers integrate deeply with hospitals, laboratories, EMR/EHR systems, and TPAs. These APIs exchange PHI and coded diagnoses governed by HIPAA, creating severe compliance risk if breached.

Digital distributors and aggregators amplify open access to quote engines, increasing exposure to high-volume automated abuse. Reinsurers exchange actuarial data and claims portfolios via backend APIs that are often overlooked in security audits.

Finally, legacy PAS systems introduce risk through outdated protocols, overly permissive endpoints, and historical integrations that remain active long after modernization projects. These older APIs often bypass modern identity controls.

As insurers add new digital products, partners, and channels, the attack surface increases exponentially. This makes API security a core business priority.

API-Driven Fraud and Security Risks in Insurance

Modern insurance APIs face risks that extend beyond classic exploits. Attackers increasingly target business logic, sensitive workflows, identity verification processes, and dynamic data inputs that influence underwriting and claims. Below is a comprehensive breakdown of the most critical risks insurers must address today.

Exposure of High-Context Policyholder Data

Insurance records combine personal identity details with financial, medical, and behavioral information, making them more valuable than typical PII. Attackers exploit API endpoints that return full policy objects or claim details without proper field filtering or access validation. Once exposed, this data fuels identity theft, synthetic identity creation, and targeted fraud schemes.
Regulators also classify insurance data as high sensitivity, and breaches often trigger compliance penalties under GDPR and NAIC standards.

Insurers should implement strict field-level and object-level access controls, tokenize sensitive data, and continuously monitor API access for anomalies to prevent unauthorized exposure of high-context policyholder information.

Manipulation of Underwriting and Risk Inputs

Underwriting models increasingly rely on API-fed inputs such as driving scores, property condition metadata, IoT sensor outputs, medical indicators, and external risk models. Attackers manipulate these inputs to influence pricing. Spoofed telematics routes, tampered property readings, or manipulated timestamps can artificially reduce premiums or change risk classifications. Because these requests are structurally valid, they often bypass traditional security filters.

Insurers should enforce input validation, verify data integrity, monitor for behavioral anomalies, and use cryptographic signing for IoT and telemetry data to prevent manipulation of underwriting inputs.

Claims Workflow Bypass and Unauthorized Step Invocation

Claims workflows involve sequential steps designed to maintain accuracy and detect fraud. Attackers study these flows and directly invoke later-stage APIs without completing earlier steps, skipping crucial validations. Examples include triggering approvals before assessments or invoking settlement APIs without adequate documentation. These bypasses result in unauthorized payouts and broken audit trails, making them extremely damaging.

Insurers should leverage API security solution that enforce workflow-based authorization, validate each step in the claims process, and maintain detailed audit logs to detect and prevent unauthorized step invocation.

Evidence and Document Integrity Attacks

Claims depend on evidence such as photos, documents, reports, and invoices. Attackers manipulate metadata, timestamps, GPS coordinates, or alter content using editing tools. As insurers adopt OCR and AI-based document processing, manipulated evidence can pass automated checks. A falsified repair estimate, medical report, or accident photo can directly cause financial loss.

Insurers should validate the integrity of all uploaded evidence using digital signatures, metadata checks, hash verification, and tamper-detection mechanisms to prevent falsified documentation from being accepted.

Telematics and IoT Spoofing

Usage-based insurance (UBI) relies on API-fed telemetry from mobile apps and IoT devices. Attackers replay benign routes, fabricate driving patterns, clone device identifiers, or submit sensor data from emulators. Because pricing and claims often depend on this data, telematics spoofing undermines the integrity of risk assessment.

This risk grows as insurers expand mileage-based, behavior-based, and device-based pricing models. Insurers should implement device attestation, encrypt telemetry data, prevent replay attacks, and monitor for anomalous sensor patterns to ensure telematics and IoT data are trustworthy.

Quote Engine Abuse and Pricing Model Mining

Quote APIs exposed through aggregators or embedded channels are prime targets for automated scraping and iterative testing. Attackers vary input parameters to reverse-engineer pricing models, identify anomalies, or extract competitor data. These high-volume requests degrade system performance and enable fraud campaigns.

Insurers should deploy rate limiting, monitor request patterns for automated access, and implement bot detection mechanisms to protect quote engines and prevent pricing model abuse.

Agent and Broker Account Takeover

Agents and brokers possess privileged access to customer data, endorsements, servicing capabilities, and claims information. Attackers use credential stuffing, phishing, or session hijacking to compromise these accounts. Once inside, they can modify policies, steal large datasets, or submit fraudulent claims at scale. Because agent accounts manage hundreds of customers, ATO incidents have widespread consequences.

Insurers should enforce multi-factor authentication, monitor sessions for anomalies, and enforce granular role-based access controls to safeguard agent and broker accounts.

Claims Inflation and Sequential Manipulation

Fraud rings increasingly use APIs to incrementally inflate legitimate claims. They submit small updates such as slightly increasing damage estimates or adding new documents to avoid fraud thresholds. Automated systems often fail to recognize these subtle patterns without behavioral analysis.

API security solution for insurance should implement behavioral analytics, anomaly detection, and sequence monitoring to identify and block incremental claims inflation.

Shadow, Rogue, and Legacy API Exposure

Legacy SOAP/XML APIs, older ESB services, deprecated endpoints, and temporary integrations often remain active outside governance. These APIs return verbose responses, use outdated authentication, and expose sensitive fields. Because they operate beneath modern visibility layers, attackers target them deliberately.

API security solution for insurance should maintain an inventory of all APIs, decommission unused endpoints, enforce modern authentication, and continuously monitor legacy API traffic.

Healthcare, Hospital, and TPA Integration Risks

Health insurers integrate with hospitals, labs, EMR systems, and TPAs. These partners vary widely in security maturity. API weaknesses on the partner side often become entry points for attackers, exposing PHI protected under HIPAA and regional health data laws.

Insurers should enforce security standards for partners, use mutual TLS, filter API traffic via WAAP, and continuously assess partner security to prevent breaches.

API-Layer DDoS and Resource Exhaustion

Claims AI, OCR, telematics ingestion, and quote engines are computationally heavy. Attackers overwhelm them by sending low-volume but expensive requests, causing slowdowns without triggering volumetric DDoS protections.

Insurers should deploy request throttling, dynamic load balancing, compute-cost monitoring, and API-layer bot protection to mitigate resource exhaustion attacks.

Mapping the OWASP API Security Top 10 to Real-World Insurance Risks

To effectively manage API risk management, it is crucial to understand the specific threats. The OWASP API Security Top 10 provides a globally recognized framework for identifying the most critical API vulnerabilities. Here is how they translate to direct risks in the insurance sector:

How AppTrana API Security Helps Insurance Providers

AppTrana simplifies API security for insurers by providing a fully managed framework that unifies visibility, testing, and real-time protection.

Comprehensive API Discovery and Governance

Insurance environments often have hundreds of APIs (active, legacy, or undocumented) including partner-facing endpoints that are frequently overlooked. AppTrana continuously discovers all APIs and classifies them based on function, sensitivity, and exposure while automatically generating accurate OpenAPI (Swagger) specifications to build a unified inventory.

This ensures that no endpoint whether for claims submission, telematics ingestion, quote engines, or partner integrations remains unmonitored. By closing governance gaps, AppTrana also supports audit readiness and regulatory compliance under standards like GDPR, HIPAA, and NAIC guidelines.

Access Validation and Schema-Aligned Enforcement

To prevent unauthorized access to sensitive policyholders or underwriting data, AppTrana enforces robust identity validation using OAuth 2.0, mutual TLS, scoped API keys, and server-side authorization checks. This ensures that only authenticated and authorized requests can perform critical operations, such as updating coverage details, processing claims, or retrieving customer information.

Schema-aligned request validation blocks malformed payloads, parameter tampering, and irregular request structures before they reach backend workflows, protecting underwriting models, claims pipelines, and pricing engines from manipulation.

Data Confidentiality and Transaction Integrity

Insurance APIs often handle high-value personal, medical, financial, and behavioral data. AppTrana ensures confidentiality and integrity by enforcing encryption in transit and at rest, data minimization, and selective field masking.

These protections reduce exposure in case of partial compromise and ensure sensitive operations, including eKYC verification, claims documentation uploads, telematics ingestion, and reinsurance data exchange remain secure.

Behavior-Based Monitoring and Anomaly Detection

Fraudsters often mimic legitimate API behavior, making static security rules insufficient. AppTrana leverages AI-driven behavior-based monitoring to learn typical traffic patterns across insurance APIs and flag anomalies such as repeated authentication attempts, unusual claim submissions, token misuse, or suspicious policy data scraping.

When anomalies are detected, AppTrana triggers targeted actions like throttling or blocking, preventing fraudulent claims, unauthorized policy modifications, or automated attacks while minimizing impact on legitimate users.

Adaptive Rate Limiting and API-Layer DDoS Protection

Insurance APIs supporting claim submission, telematics ingestion, or quote engines can experience sudden traffic spikes. AppTrana’s adaptive rate limiting dynamically adjusts thresholds in real time, prioritizing essential workflows like claim approvals, policy updates, or customer onboarding while slowing or filtering excessive or abnormal requests.

This approach mitigates API-layer DDoS or resource exhaustion attacks, ensuring critical insurance services remain available even under heavy load.

Advanced Bot Protection

Automated threats targeting insurance APIs such as credential stuffing, account enumeration, pricing model mining, and mass quote scraping are on the rise. AppTrana’s AI-powered bot protection differentiates trusted automation, like partner system traffic, from malicious bots attempting to exploit login, claims, or underwriting workflows.

Suspicious activity is immediately blocked or challenged, preventing fraud, account takeover, and automated abuse without disrupting legitimate customer or partner interactions.

Continuous Testing, CI/CD Integration, and Lifecycle Support

Every change to an insurance API whether a new claims workflow, telematics integration, partner connection, or mobile update introduces potential risk. AppTrana integrates security directly into development and deployment processes:

• Automated API scanning checks for configuration vulnerabilities, authentication gaps, and exposure flaws.
• Manual penetration testing identifies logic-level weaknesses, business logic exploits, and fraud patterns.
• CI/CD integration ensures continuous security testing, so vulnerabilities are identified before APIs go live.

When new risks are discovered, AppTrana enables rapid remediation to block exploits immediately while development teams address code fixes.

Building a Resilient and Trusted Insurance API Ecosystem

Insurance innovation depends on APIs for underwriting, claims processing, partner integration, and customer engagement. AppTrana combines automated discovery, continuous testing, behavior-based threat detection, and a positive security model to safeguard every API interaction.

With unified visibility and real-time protection, insurers can scale their digital services securely, ensuring that policyholder data, claims workflows, telematics inputs, and reinsurance exchanges remain protected at every step while maintaining regulatory compliance and customer trust.

Insurers can secure their APIs with AppTrana -start your free trial today to gain complete visibility and real-time protection.

Top API Security Platforms for Insurance Providers 2025

Choosing the right API security solution is crucial for protecting sensitive policyholder information, preventing fraud, and maintaining compliance. The API security tools listed below are widely used by insurers and offer strong protection for complex API environments.

For a detailed comparison of leading API security vendors, explore our complete guide to the Best API Security Tools.

Securing the Digital Future of Insurance

A modern API security program grounded in continuous discovery, schema governance, behavioral detection, fraud-aware testing, and expert-managed protection is essential.
Indusface AppTrana delivers the comprehensive visibility, control, and intelligence required to protect policyholders, prevent financial loss, sustain regulatory trust, and support digital transformation.

Insurers that invest in strong API security today will be best positioned to compete confidently in the future of digital insurance.

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