In a recent interview at Rims this week, Ben Beeson, cyber practice leader at Lockton, discussed technology’s role in driving an increase in cyber capacity. As Beeson explains, “the capacity in the market for cyber insurance has been constrained for some time primarily for two reasons. Number one, a lack of actuarial data – it’s a new risk area to model the risk. Number two, the industry has never seen a risk so interconnected as cyber risk and that’s driving the fear of accumulation or aggregation of risk that is not well understood today.” To help drive an increase in capacity, the cyber industry is lobbying congress for a data repository to help model this risk.

 

Additionally, Beeson describes additional emerging technologies such as a tool to help insurers examine their policy holders from the outside in to model and score their risk based on vulnerabilities such as malicious traffic their network is attracting. Another concern in the industry is the ability to correctly quantify cyber risk.  According to Beeson, one new tool will help CISOs look at critical corporate assets and put financial numbers around those assets to help them explain to the executives and the board what the risk exposure is in financial terms. This ultimately leads to how much cyber insurance an organization should buy and in turn, also helps insurers price this risk. While many of these technologies already exist today, Beeson explains that it is crucial for the insurer to accept these emerging technologies as part of the underwriting process.

Leave a Reply

You must be logged in to post a comment.