Cyber liability is one of the few new lines of business in the insurance industry in the last decade. Adoption is growing at double-digit rates—an attractive offering for insurers looking to expand their books and client base. The danger for insurers is that models to rate and underwrite new business can’t rely on past losses to estimate future losses.
So, how can the industry continue to invest in this growing line of business while also ensuring that growth is profitable? This need has created a new marketplace of vendors who offer cyber liability risk assessment solutions to help insurers assess a complex range of risks.
Vendors typically help insurers with this task with four types of offerings: data, AI/analytics, models, and risk scores. Some prominent providers include BitSight Technologies, CyberCube Analytics, CyberWrite, FICO, Guidewire, ISO/Verisk, Kovrr, RMS, SecurityScorecard, Surance.io, and Willis Re.
It is still a struggle for actuaries and underwriters to get a true picture of exposures even though cyber liability coverages have been around for some time. Underwriting has tended towards conservatism as a result, with exclusions and limits on coverage. Yet the emergence of cyber modelling and analytics vendors offers the promise of less intrusive and more accurate underwriting.
More information on cyber risk assessment trends, concerns, and prominent vendors is available in Novarica’s recent brief, Cyber Risk Scoring and Modeling: Overview and Prominent Providers.
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