Coalition Releases New Method for Modeling Aggregate Cyber Risk, Demonstrating Cyber is Insurable
Coalition, the world's first Active Insurance provider designed to prevent digital risk before it strikes, today released the all-new Active Cyber Risk Model, a practical framework for understanding cyber risk aggregation that provides an ongoing view into organizations' cyber risks and identifies preventive measures to protect against new threats. The model - which simulates how a singular cyber risk event can trigger a chain reaction resulting in substantial economic losses - illustrated the possibility of nearly $30 billion in total insured losses if an aggregated cyber event occurred.
"As the industry continues to dwell on catastrophic cyber events and how best to offer coverage, if at all, one thing remains abundantly clear: cyber risk is insurable," said Joshua Motta, Chief Executive Officer and co-founder at Coalition. "The insurance industry is uniquely positioned and capable of mitigating and protecting organizations from emerging cyber risks, and we are committed to protecting the hundreds of thousands of customers we serve."
Built on Coalition's proprietary data collection platform and knowledge graph, which captures 48 trillion monthly events, the Active Cyber Risk Model offers a more accurate picture of cyber risk for organizations and the broader economy. In a simulation modeled against a sampling of 5,000 American companies, Coalition found that a one-in-250-year cyber event could cost more than $370 million in losses. When extrapolated across the entire U.S. economy, a catastrophic cyber event could cost an estimated $29.8 billion in total losses.
The Active Cyber Risk Model leverages Coalition's technology platform that actively monitors both the internet and the ever-changing landscape of vulnerabilities and attack vectors across hundreds of thousands of companies.
Coalition monitors the digital technologies and third-party vendors that its policyholders use to inform its model. These shared technology dependencies, which Coalition calls "aggregation technologies and vendors (ATVs)," create aggregate cyber risk. Coalition uses its ATV data to track and measure the interconnectedness of technologies and identify where cyber risk aggregates. Going forward, Coalition will use its model to determine which companies in its portfolio could be impacted by a cyber event.
To learn more about Coalition's Active Cyber Risk Model, please download the report: https://info.coalitioninc.com/download-active-cyber-risk-model-2023-03-21.html.
Coalition Insurance Solutions Inc. ("CIS"), a licensed insurance producer with its principal place of business in San Francisco, CA (Cal. license #0L76155), is acting on behalf of a number of unaffiliated insurance companies. Insurance products offered through CIS may not be available in all states. CIS may receive compensation from an insurer or other intermediary in connection with the sale of insurance. All decisions regarding any insurance products referenced herein, including approval for coverage, premium, commission, and fees, will be made solely by the insurer underwriting the insurance under the insurer's then-current criteria. All insurance products are governed by the terms, conditions, limitations, and exclusions set forth in the applicable insurance policy. Please see a copy of your policy for the full terms, conditions, and exclusions. Copyright © 2023. All rights reserved. Coalition and the Coalition logo are trademarks of Coalition, Inc. or its affiliates.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230320005566/en/