Over the past years, there have been a few noteworthy changes in cyber security, including processes like underwriting. There has been a rise in ransomware attacks claims, leading to a spike in business interruption losses. Moreover, there has also been an increase in lawsuits regarding the new consumer privacy legislation, like the GDPR, BIPA, and CCPA. However, insurers believe that this is just the beginning and expect even more claims in the years ahead.
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This is why companies need to do everything in their hands to better prepare themselves for the challenges of these unprecedented times. The answer you are looking for might be in one of the cyber risk modeling platforms like https://www.kovrr.com/.
Many companies offer convenient software solutions that have the ability to deliver both insurers and organizations the needed data-driven insights into cyber risk exposures transparently.
The use of AI-powered risk models allows everyone from CISOs and chief risk officers, to risk professionals and catastrophe modelers to understand, manage, and quantify cyber security risks.
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The Modern Cyber Risks & Challenges Companies Face
Similar to the issue of environmental pollution policies from the mid-90s, cyber insurers have a hard time with cyber risks. It is impossible to predict where and when a spill might occur, and it is just as hard to foresee a malicious attack beforehand. That being said, in both cases organizations have responsibility for their business practices and control.
These are the most common challenges that companies face regarding cyber risks:
Almost all companies collect data, though organizations directly purchase data from someone else in some cases. It’s worth noting that these organizations are responsible for the said data, even though they are not the ones collecting it. If your company buys data from a third party, you still need to make sure that the data is securely collected by the vendor selling it to you.
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The responsibility doesn’t end with data collection. You also need to know where the data is stored and transmitted as well. It is important to have information if the data is kept on-premises, on a cloud, or in a data center. In the best-case scenario, you need to know the region where this data is stored.
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Last but least, the security of the collected and stored data is the company’s responsibility too. If you own or work in a company that operates like this, you need to know exactly how the policyholder and the supply chain secure the data. Just a single weak control in the supply stream can cause a data breach.
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How Using A Cyber Underwriting Solution Benefits You
One of the main benefits of using a cyber underwriting solution is the cyber risk quantification you can do with it. It will allow you to accurately assess the potential economic impact and the potential loss. With some of these convenient tools, you can easily break down the probable maximum loss by coverage.
Platforms like Kovrr will give you the insight you need to understand the projected insured attritional losses and large losses of all kinds of different scenarios. This includes data theft, denial of service, ransomware, extortion, and others.
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Insights like these can also be useful for insurers to better segment their customers. Through analysis of the company’s usage of commercial software and third-party services, location, and similar parameters, they can determine their vulnerability to a cyber attack. By using your existing P&C portfolios, you can identify new potential clients for cyber security.
As more and more businesses transition to remote work, the cyber underwriting processes become more complex. Nowadays, attackers have new ways to exploit, and the number of attacks is at an all-time high.
Modern problems require modern solutions, and this is why cyber risk modeling platforms are necessary to help us stand up to the challenges. Cyber underwriting solutions can be beneficial to insurers and organizations to better quantify the risks, specifically through the use of metrics and analysis. They provide insurers with the needed insight to accurately determine if your business is a risk that is worthwhile.
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