CompTIA CASP+ Practice Test

What aspect is essential for a general insurance company when setting up an online business?

1. Reduction in product variety

2. Robust security framework

3. Minimizing user access

4. Focus on physical branch locations

The correct answer is: Robust security framework

A robust security framework is essential for a general insurance company when setting up an online business because the digital landscape poses significant risks in terms of data breaches, identity theft, and cyberattacks. Given that insurance companies handle sensitive personal and financial information, implementing strong security measures is crucial to protect customer data, maintain privacy, and comply with regulatory requirements. A solid security framework includes encryption, secure user authentication, and continuous monitoring for vulnerabilities, which collectively help in safeguarding against potential threats. This builds customer trust and confidence in the online services provided by the insurance company, ensuring not only legal compliance but also enhancing the company’s reputation. In contrast, reducing product variety, minimizing user access, or focusing on physical branch locations do not adequately address the primary concerns and operational requirements of conducting business online. These alternatives may limit a company's ability to meet customer needs effectively or adapt to changing market conditions, which could ultimately hinder its growth and competitiveness in the online insurance marketplace.