TMCnet News
Cyence and Lloyd's Issue Joint Report Underscoring Growing Scope of Cyber Risk for InsurersSAN MATEO, Calif., July 17, 2017 /PRNewswire/ -- Cyence, the leading cyber risk analytics firm, and Lloyd's of London, the world's leading specialty insurance market, today announced a joint report that explores the financial impact of two specific cyber scenarios and highlights the importance of measuring cyber risk in terms of dollars and probabilities. Leveraging Cyence's economic modeling platform for cyber risk, the extensive analyses identified and quantified the potential, detrimental outcomes that could affect insurance companies' cyber portfolios. The report focused on two increasingly common cyber events: a cloud service provider outage and a major, zero-day vulnerability exploit falling into the wrong hands. The report concludes that cyber losses have grown in severity to the point of rivaling major hurricanes in their total potential damages. In each scenario modeled, total losses reached into the tens of billions for extreme return periods.
Today, Lloyd's estimates the global cyber market is worth between $3 - $3.5 bilion (Stanley, 2017). This report was designed to deepen insurers' and risk managers' understanding of cyber risk exposure to improve portfolio exposure management, set appropriate limits and expand confidently into this quickly-growing line of insurance. Furthermore, these scenarios will be critical in moving the industry as a whole toward a standardized approach of measuring cyber risk in the wake of the growing number of high-profile cyber events. "This report's findings suggest economic losses from cyber events have the potential to be as large as those caused by major hurricanes. Insurers could benefit from thinking about cyber cover in these terms and making explicit allowances for aggregated cyber-related catastrophes. To achieve this, data collection and quality is important, especially as cyber risks are constantly changing," said Trevor Maynard, head of innovation at Lloyd's. "To date, no computer has been created that could not be hacked—a sobering fact given our radical dependence on these machines for everything from our nation's power grid to air traffic control to financial services. Economic losses are growing exponentially and all companies need a strategy to mitigate cyber risk in today's world," said Marc Goodman, advisor to Cyence and global cyber risk strategist. Methodology "Collaborating with Lloyd's market groups and technical third-party experts allowed us to ensure these scenarios were plausible and relevant to the insurance risk management community," said George Ng, chief technology officer and co-founder at Cyence. "Our goal is to arm companies with a common framework to discuss and understand cyber risk in a big picture, accessible manner. It's a complex and constantly evolving landscape, but with our economic modeling-based approach, we can confidently move the market closer to the standardized aggregation frameworks and resiliency models common to traditional Property & Casualty insurance coverage lines." To learn more about the parameters of each scenario, download the full report here and read more on our blog. About Lloyd's: About Cyence: View original content:http://www.prnewswire.com/news-releases/cyence-and-lloyds-issue-joint-report-underscoring-growing-scope-of-cyber-risk-for-insurers-300488805.html SOURCE Cyence |