Introduction:
At Carrot Connect, we understand the unique complexities insurers face in today’s fast-evolving digital landscape.
With the Digital Operational Resilience Act (DORA) set to take effect in January 2025, financial entities across the EU are being called upon to significantly strengthen their frameworks for managing IT risks. This includes establishing detailed incident response plans, performing regular resilience testing, and ensuring stringent oversight of IT risk management practices.
One of DORA’s key pillars is its focus on third-party risk. Insurers are now tasked with integrating sophisticated strategies to manage third-party service providers and encouraging collaboration within the industry to share critical information on cyber threats. This is no small feat—it requires a proactive approach to compliance, risk mitigation, and governance, all designed to protect financial systems from disruptions.
The DORA Compliance for Insurers with Legacy IT Systems
Introducing DORA presents significant hurdles for many insurers—especially those still relying on legacy IT systems. These outdated infrastructures often fall short of the advanced cybersecurity, incident response, and reporting capabilities that DORA demands. Initially designed for past industry needs, legacy systems were never built with modern cyber threats or compliance requirements in mind, creating considerable obstacles in meeting the high standards set by DORA.
At Carrot Connect, we’ve seen the challenges insurers face when integrating legacy systems with modern technologies and third-party services. The sheer complexity of achieving seamless data exchange, maintaining interoperability, and ensuring robust monitoring for risk management can place considerable strain on these older platforms.
Additionally, legacy systems struggle to scale under DORA’s rigorous performance and continuous monitoring requirements, often falling short regarding real-time threat detection and incident reporting.
The Path Forward: Modernisation and Compliance Strategies
Insurers must now examine their existing IT ecosystems closely.
Modernising legacy systems and aligning IT strategies with regulatory demands is essential to remain competitive and compliant under DORA. At Carrot Connect, we specialise in helping insurers overcome these challenges by developing tailored modernisation plans that allow organisations to adopt scalable, resilient, and secure digital infrastructure.
Key strategies include:
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- Cloud Migration and Hybrid Solutions: Insurers can transition from legacy systems to cloud-based or hybrid infrastructures. These solutions offer greater scalability, enhanced security, and flexibility to meet DORA’s requirements and provide access to real-time monitoring and advanced threat detection capabilities.
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- Partnerships with Third-Party Service Providers: Third-party risk management is a critical element of DORA. Insurers must ensure that their partners are equally compliant. Carrot Connect can help you select, integrate, and continuously monitor third-party vendors to minimise risks and ensure seamless data sharing.
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- Comprehensive IT Audits and Cyber Resilience Testing: A thorough audit of current IT systems is essential for identifying gaps in compliance and resilience. Carrot Connect conducts in-depth assessments to evaluate your IT infrastructure’s ability to withstand cyberattacks and disruptions. Regular testing ensures your systems meet DORA’s ongoing incident response and reporting requirements.
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- Governance and Oversight Enhancements: DORA emphasises the need for effective governance structures that oversee IT risk management across the board. By implementing robust governance frameworks, insurers can ensure that the entire organisation—across all departments—remains aligned with DORA’s cybersecurity mandates.
Preparing for the Future
As insurers face an ever-changing regulatory environment, preparation is key.
Carrot Connect is committed to helping insurers modernise their IT landscapes and ensure seamless compliance with DORA. Our team of experienced IT consultants works closely with clients to design, implement, and manage IT infrastructures that are both resilient and compliant with the latest industry regulations. Whether you’re grappling with legacy systems or aiming to stay ahead of the curve with cutting-edge digital solutions, we are here to guide you every step of the way.
Now is the time for you to take action. With DORA’s deadline approaching, insurers must ensure their IT systems are prepared to meet the stringent requirements of this critical regulation. Contact Carrot Connect today for a comprehensive consultation on future-proof your IT systems and ensure your organisation is ready to face the digital resilience challenges ahead.
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