|PR Newswire Association LLC|
Recently reported data breaches at large corporations, educational institutions, and government agencies are some of the many examples of cyber-related events that illustrate the rapid growth of cyber risk. Ways of managing cyber risk exposure range from employing more effective information security measures to wider use of cyber insurance.
Cyber risk is one of the key components of operational risk to which every company is exposed. In the context of cyber risk insurance as a mechanism of risk transfer, the analysis of cyber risk is essential in setting insurance premium levels, evaluating liabilities for insured cyber losses, and enterprise risk management of insurance companies underwriting cyber risk insurance.
This initiative has a strong potential to benefit enterprises and other entities exposed to cyber risk, policyholders purchasing cyber risk insurance, insurance and reinsurance industries, and society as a whole.
"We believe that in addressing the challenge of cyber risk analysis, it is essential to follow a multidisciplinary approach that brings together experts in actuarial science, cybersecurity and information technology, big data analytics, legal and other fields," said
Many aspects of cyber risk remain poorly understood. With few exceptions, the expertise needed to analyze cyber-related events such as data breaches or business interruption, their probabilities, and their ultimate financial impact is limited, both at the companies directly exposed to the risk and in the insurance industry. Often, unscientific qualitative methods are used for this task. While there is a growing body of research on some of the specific IT aspects of the risk, it is particularly difficult to tie that research to financial outcomes and insurance coverage.
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