The insurance industry is built on trust, scale, and history. But legacy systems and decades-old infrastructure are slowing insurers as they navigate increasingly digital supplier relationships. External administrators, legal service providers, and managed IT vendors all depend on digital access, yet many insurers still rely on identity systems built for internal employees.
These systems were not designed for today's demands. As insurers lean more on third parties to deliver services, the inability to manage supplier access efficiently becomes a source of risk, delay, and noncompliance.
The Hidden Cost of Supplier Friction
Suppliers are critical to daily insurance operations, but their user experience is often overlooked. Onboarding can take days. Most insurers still rely on fragmented tools to manage supplier access. These include email requests, ticketing systems, and one-off provisioning scripts. The workflows are slow, inconsistent, and heavily reliant on institutional knowledge. As external relationships grow more complex, this patchwork leads to errors, delays, and blind spots in access visibility. Communication is fragmented. Manual provisioning introduces delays and errors. These bottlenecks do not just frustrate external teams. They delay policy servicing, claims handling, and tech rollouts.
Loose identity verification also opens the door to impersonation and fraud, especially when outdated processes rely on email requests and human approvals.
Inadequate Delegated Access
Insurance workflows often mean insurers must manage multiple external users or teams across various systems, be they claims adjusters, legal representatives, or IT support. If they cannot autonomously manage access rights, they are forced to rely on centralized IT intervention, creating bottlenecks and increasing the risk of human error.
Not unlike the challenge insurers face with delegated access for policyholders and their proxies, suppliers frequently operate under a hierarchy of users that need different levels of access. Without well-designed, role-based access controls, these relationships can introduce vulnerabilities and inefficiencies.
Security Vulnerabilities
The increase in third-party integrations has expanded insurers' attack surface. Poorly managed suppliers can become inadvertent conduits for cyberattacks. High-profile incidents, such as the Infosys McCamish Systems breach, highlight how external access points can be a stepping stone to compromising millions of sensitive records.
Bad actors are highly adept at exploiting fragmented identity and access management (IAM) systems, pivoting between digital portals and human-assisted channels like call centers. If a supplier's access is not continuously monitored and intelligently verified, attackers can escalate privileges or move laterally across systems unnoticed.
Regulatory Compliance Challenges
Insurance providers operate under growing regulatory mandates such as GDPR, CCPA, PIPEDA, and industry-specific compliance requirements. When suppliers interact with sensitive customer data, complexity around consent, data minimization, auditability, and breach reporting is inevitable.
When suppliers are not fully integrated into an IAM system, insurers battle to track which external users accessed what data and when, facing a lack of visibility that can endanger the business.
Operational Inefficiencies
Many insurers still rely on manual processes to create and remove supplier accounts. This increases the chance of human error and makes it harder to ensure that access is removed when a contract ends.
This mirrors a broader insurance industry challenge: outdated customer directories that aren't regularly audited or verified. Just as insurers must revisit and clean up dormant policyholder records, they must also manage the supplier identity lifecycle continuously.
How B2B IAM Addresses These Challenges
Modern B2B IAM solutions are designed to handle the scale, complexity, and operational nuance of insurance-related industries. Key capabilities include:
Federated Identity and Single Sign-On (SSO)
In the insurance sector, third-party agents, brokers, and service providers often need access to internal portals for claims processing, underwriting tools, or policy management systems. Federated identity enables these external users to authenticate using their own trusted identity providers, reducing the need for duplicated credentials and minimizing overprovisioning. Combined with single sign-on (SSO), federated identity ensures seamless and secure access while maintaining strict access controls aligned with compliance requirements.
Self-Service Onboarding and Automated Lifecycle Management
Modern B2B IAM solutions automate the entire supplier onboarding process. Self-service portals, identity proofing, and pre-configured workflows simplify access provisioning and apply consistent verification requirements to all users. Access is automatically revoked when contracts or relationships end, reducing human error and limiting risk.
Delegation
B2B IAM enables suppliers to manage their own users and access rights within strict, pre-defined boundaries through delegated user management. This model solves a key scalability problem: Insurers cannot realistically handle every external access request themselves. By allowing trusted third parties to manage their internal teams, insurers reduce operational overhead without giving up control. Governance and security policies still apply, and the process avoids the bottlenecks of central IT intervention.
Adaptive Authentication and Risk-Based Access
Advanced B2B IAM systems enforce strong, continuous authentication, including multi-factor authentication (MFA) and adaptive access based on behavioral analytics. real-time monitoring and detection of anomalies, like access from high-risk geographies or at odd times.
Fine-Grained Authorization
Most insurers rely on role-based access control (RBAC) as the foundation for managing access. It assigns permissions based on a user's function and is effective for internal teams. But in supplier ecosystems, roles alone are not enough.
As external relationships become more complex, attribute-based access control (ABAC) helps refine access using context like geography, business unit, or risk level. Even then, a key dimension remains missing: who the user represents.
Relationship-based access control (ReBAC) fills that gap. It evaluates the connection between the user and the insurer. A supplier working on behalf of Insurer A should only see data tied to that relationship, even if they have the same role and attributes as a supplier representing Insurer B.
RBAC, ABAC, and ReBAC are not competing models. Together, they provide the layered control insurers need to manage external access precisely, reduce exposure, and support growing third-party networks without added risk.
Audit Logging and Compliance Reporting
To meet regulatory standards, these solutions provide detailed audit trails, consent monitoring, and policy-enforced access controls. Every supplier activity is logged, verifiable, and auditable.
Managing Supplier Relationships Securely and Efficiently
Insurers will always depend on external partners to deliver digital services, so the challenges of supplier integration will become more complex and riskier. Whether the threat comes from dormant accounts, weak verification standards, or inefficient workflows, the consequences can be dire: data breaches, regulatory fines, and lost trust.
B2B IAM is becoming a critical capability in managing these supplier relationships securely and efficiently. It improves security and compliance while enhancing agility, UX, and operational alignment. In a digital insurance market, entities prioritizing flexible, risk-aware identity strategies will mitigate threats and set themselves apart as trusted, modern partners.
