By Peter Waring (pictured), CTO of JAVLN
Could you pull everything on the Johnson account by end of day?
It’s a question every broker has heard. Maybe it’s for a renewal. Maybe it’s a compliance audit. Maybe it’s because a client is shopping around and you need to move fast.
You open your system. Client files. Policy documents. Email trails. Financial records. Notes from three years of conversations. It’s all there.
But here’s the question most brokers don’t ask: who else could access all of that?
Your policy and document management system isn’t just software. It’s a vault containing your clients’ most sensitive information. Personal details. Financial records. Business data you’ve built over years of relationships.
Features matter. Price matters. But if the vault isn’t secure, none of that matters.
So what should you actually be looking for in a software partner’s security credentials?
SOC 2 Type 2: why you should care, and no, it’s not something you wear on your feet
SOC 2 (System and Organisation Controls) is like a comprehensive health check for technology companies. It’s an independent audit that examines how we protect your data and maintain our systems. Think of it as a detailed report card that covers key areas of security, availability and confidentiality.
The “Type 2” part is important. A SOC 2 Type 2 report means auditors didn’t just look at policies on paper. They spent time testing whether controls actually work in practice, day in and day out.
For insurance brokers, this compliance sits alongside frameworks like the Essential Eight cybersecurity mitigation strategies developed by the Australian Cyber Security Centre (ACSC). They’re all part of building a robust cybersecurity foundation that protects your business and clients.
While SOC 2 Type 2 certification focuses on vendor accountability, brokers should also implement a comprehensive approach to cybersecurity across their entire operation to protect against evolving threats.
Type 1 vs Type 2: understanding the difference
When evaluating software vendors, you might hear about both SOC 2 Type 1 and Type 2 certifications. Here’s what sets them apart:
SOC 2 Type 1 is a point-in-time assessment. Auditors verify that security controls exist on a specific date. Think of it as checking that your fire extinguishers are installed, but not testing whether they actually work when you need them.
SOC 2 Type 2 is a continuous audit over 6-12 months. Auditors test whether those controls are consistently maintained and effective over time. This is like having fire drills throughout the year to prove your team knows how to respond in an emergency.
Type 2 provides significantly more assurance because it proves ongoing commitment, not just capability on paper.
The 5 Trust Service criteria explained
SOC 2 audits evaluate five Trust Service criteria. The three most critical for insurance brokers are:
Security
Protection against unauthorised access, both physical and logical. This includes measures like multi-factor authentication, encryption, and network security controls.
Availability
Systems are operational and accessible when needed. For brokers, this means you can access client data, process quotes, and manage renewals without unexpected downtime, especially during critical renewal periods.
Confidentiality
Sensitive information stays private and is only accessible to authorised individuals. This is essential when managing client financial records, personal information, and policy details.
The other two criteria, Processing Integrity and Privacy, may also apply depending on the vendor’s services.
Why SOC 2 Type 2 matters for your broker software
Many brokers still worry that cloud-based systems offer inferior security compared to traditional on-premise servers. The reality is that certified cloud providers can invest in protection that would be cost-prohibitive for individual brokerages to maintain independently.
Whether you hold an AFSL or operate under one, regulators expect you to keep up with cybersecurity standards. You need to know that your technology partners take data security as seriously as you do.
Here’s what this means in practical terms:
Peace of mind
Your client data is protected by security controls that have been independently verified.
Compliance confidence
The vendor’s report helps you meet your own regulatory requirements and demonstrate due diligence to your clients. It’s another layer in your compliance and security framework, working alongside practices like the Essential Eight.
Reliable service
The availability standards maintained mean you can count on the platforms when you need them most. Whether it’s during renewal season or when urgent claims need processing.
Professional assurance
You can confidently tell your clients that your technology partners meet rigorous standards for data protection and system reliability. Security should be a non-negotiable when evaluating broker management systems.
A win for the industry
When technology providers in the insurance space maintain high security standards, it benefits everyone. It builds trust with clients, raises the bar for the entire industry, and demonstrates that insurance technology is reliable.
As the insurance industry continues its digital transformation, and as cyber threats become more sophisticated, having certified, secure platforms becomes increasingly important.
Data breaches happen across all industries. For brokers, they can lead to damage to your reputation, regulatory penalties, business interruption, and unexpected remediation costs.
While secure software might seem expensive, it’s crucial to consider the total cost of ownership. The financial impact of a data breach versus the predictable cost of certified, secure software.
Security isn’t “set and forget”
SOC 2 isn’t a “set and forget” report. It requires ongoing effort, not a one-time setup.
Vendors must follow a continuous audit process. Consistently improving controls and maintaining strong standards for data protection and system reliability.
Questions you should be asking
Use these questions when evaluating any software vendor. Clear, confident answers show you’re dealing with a partner who can support your business.
Are you SOC 2 Type 2 certified?
Type 2 provides the continuous audit that proves ongoing commitment.
Can I see your current report?
Reputable vendors share their SOC 2 report under a Non-Disclosure Agreement.
Is MFA required for all users?
Multi-factor authentication reduces unauthorised access risk. should be mandatory, not optional.
What encryption standards protect my data?
Both at rest (stored on servers) and in transit (being transmitted).
Where is my data stored?
Local data centres in Australia or New Zealand help you meet privacy requirements and often provide faster access.
How are backups handled?
Automated, secure backups mean you can recover quickly from any incident without data loss or extended downtime.
What’s your incident response process?
Quality vendors have documented procedures for security events. Including how and when they’ll communicate with you.
How do you manage security updates?
Cloud platforms should deploy updates automatically. Ensuring you always have the latest protections without disrupting your work.
Was security designed into the platform from the beginning?
Security should be core to how the platform was built, not added later. This ensures comprehensive protection across all features.
Strong vendors welcome these questions. They’ve invested significantly in security and are proud to discuss it. They understand that informed customers make the best long-term partners.
Making the decision
In an industry built on trust, reliability and confidentiality security is fundamental. SOC 2 Type 2 compliance is proof that a vendor is doing everything they can to protect data and keep systems running smoothly.
Your clients trust you with their homes, businesses, properties, and livelihoods.
Make sure your software vendor has that same level of trust. Which type of vendor is protecting your client data right now?
