The industry is taking cyber risks without the tools to quantify them, leading AIR Worldwide to make silent cyber a focus
Bostonian catastrophe modeller AIR Worldwide has partnered with broker Capsicum Re to make silent cyber a focus of its risk modelling efforts.
Creating deterministic scenarios for cyber risk is an initial objective for AIR, the firm told GR in Monte Carlo.
“The reinsurance industry is taking on risks and it has not had the tools to quantify them,” said Rob Newbold, AIR, an executive vice president at AIR.
As part of the collaboration with Capsicum Re, the two firms will identify which non-cyber lines of business and industries are more likely to be exposed to silent cyber-related losses.
Capsicum is helping provide some of the data to drive the scenarios, Newbold said – anonymised to protect clients.
“Security breaches and cloud services down time are the risks we’re looking at initially,” said Newbold.
“It will continue to expand as we access more data,” he added.
The result of is expected to yield the availability of models that simulate the impact of incidents that could cause silent cyber-related losses.
“The industry is looking to us to provide more analysis to close the protection gap, and cyber is part of that,” said Newbold.
AIR will release its cyber modelling efforts as a product from late October 2018, Newbold said.
AIR is also working on three separate models for European cat risks: for inland flood; for hail storms; and for winter storms.