The reinsurance industry is looking for more data to help create probabilistic models for cyber risk, similar to the models currently used for natural disasters.
A new report by Guy Carpenter, A Clearer View of Emerging Risks, notes that cyber risk is “one of the four most important unknown risks for the industry,” along with “technology, longevity and mortality and casualty catastrophe.”
The report highlighted that evolving cyber risks pose serious challenges and threats to governments, businesses and individuals globally because data breaches “are very difficult to predict and the potential form and target of the next cyber-attack are largely unknown.”
The best way to model cyber risk would be to understand the likelihood of an event and once it happens, the size of the loss associated with the breach.