Helping cyber underwriters make better decisions fasterBy Prashant Pai | June 12, 2019
Underwriting cyber risk is hard. The threats are diverse and complicated – ranging from phishing and ransomware attempts to denial-of-service attacks and cloud-service interruptions – and they continue to multiply and evolve.
More online transactions and more information being stored and shared digitally cause dollar signs to flash in the eyes of the technologically savvy and morally unscrupulous.
As business and personal infrastructure become more deeply interconnected through the Internet of Things (IoT), this complexity is expected only to increase.
With that growing complexity comes greater demand for cyber insurance. Demand is expected soon to exceed $6 billion in annual premiums – a huge opportunity for insurers. But those writing this coverage or considering entering the market are often impeded by limited data availability, absence of historical context, and a lack of standardization in terminology. With dozens of dynamic, evolving variables and gaps in day-to-day processes, writing cyber coverage quickly and accurately will likely grow more difficult than ever before.
Key information in seconds
Verisk has launched a solution to help underwriters meet these challenges. Its new Cyber Underwriting Report – the latest addition to Verisk’s suite of cyber solutions – gives underwriters a cyber security score for the risk they’re considering for coverage, a peer score to provide context, and a profile containing critical business characteristics – all within seconds.
By streamlining the underwriting process, this ready access to critical information can help insurers write more coverage with higher confidence than otherwise might be possible.
Powered by the expertise of two Verisk businesses – the world-class cyber modeling of AIR and the insurance data, analytics, and workflow capabilities of ISO – the report is derived from both an insurance and a security perspective and includes estimates on the frequency and financial impact of incidents like data breaches and cloud service provider downtime. Its modeling is based on 12.4 million actual cyber exposures, and its underwriting summary offers actionable insights with:
- a cyber score to help with risk selection
- a score comparing the cyber risk of a company and its industry peers to all other industries
- annual probability of data compromise
- a score indicating an organization's resilience to business interruption related to any one cloud-service downtime incident
Benefits for insurers
Verisk’s Cyber Underwriting Report draws on multiple internal and external sources to help provide greater firmographic and technographic data accuracy. It combines machine learning and stochastic modeling to derive frequency and severity measures that can help underwriters estimate the financial impact of potential cyber incidents.
Available from Verisk’s ProMetrix website, delivered directly to an insurer’s policy administration or underwriting system via API, or as a downloaded file, the report provides near-instantaneous analysis based on a few basic pieces of company information. This can help underwriters make decisions in real time, with greater confidence, at volume, so they can be better positioned to meet the anticipated growth in demand.
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