Category Archives: insurance

Insurance regulators pitched on FICO-style score for cybersecurity

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In the fast growing cybersecurity insurance market, underwriters face a uniquely complex problem — measuring or estimating the risk their policy-holders face from cybercrooks, online spies and other hackers. The insurance industry “doesn’t have … a set of baseline tools or metrics … to quantify their customers’ risks,” Anand Paturi, vice president of security research and engineering at RiskSense told CyberScoop. In life insurance for instance, depending on the value of the policy, risk might be measured by reference to actuarial tables which predict life expectancy, or by a medical examination measuring a wide range of physical risk factors. “That [risk] data is how you set the price of the policy,” he explained. But, in a presentation Monday to the National Association of Insurance Commissioners 2017 National Meeting, Paturi argued that the question is much more complicated in cybersecurity. He gave as an example the potentially massive losses from the WannaCry and Petya outbreaks earlier this year. In […]

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North Carolina Hackerspace Destroyed by Fire, Members Vow to Rebuild

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There’s something about old industrial buildings that just seems to attract hackerspaces. It could be the open floor plans typical in buildings that used to house big manufacturing operations, or it could be a desire to reinvigorate places where machines once hummed and skilled hands plied their trades. Whatever the attraction, the relationship is not without risk; old buildings with wood floors and frames can be tinderboxes, and tragedy can strike at any moment.

Such a fate befell The Foothills Community Workshop in Granite Falls, North Carolina, this past Friday. Details are still sketchy as the remnants of the 75,000-square …read more

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North Carolina Hackerspace Destroyed by Fire, Members Vow to Rebuild

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There’s something about old industrial buildings that just seems to attract hackerspaces. It could be the open floor plans typical in buildings that used to house big manufacturing operations, or it could be a desire to reinvigorate places where machines once hummed and skilled hands plied their trades. Whatever the attraction, the relationship is not without risk; old buildings with wood floors and frames can be tinderboxes, and tragedy can strike at any moment.

Such a fate befell The Foothills Community Workshop in Granite Falls, North Carolina, this past Friday. Details are still sketchy as the remnants of the 75,000-square …read more

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Insurers: Major cyberattack on cloud provider could cost more than huge hurricane

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A successful major hacking attack on a global cloud provider could easily end up costing more than a huge natural disaster like Superstorm Sandy, and it could cripple the nascent cyber-insurance market even though only a fraction of the losses would be covered, a new report says. The report, which underlines the high volatility and low risk visibility that cyber-insurers face, was co-produced by venerable insurance market-maker Lloyd’s of London and Silicon Valley risk-management company Cyence. Its authors acknowledge it is hard to estimate losses from future large cyber-events with any degree of exactitude. “The understanding of cyber liability and risk exposures is relatively underdeveloped compared with other insurance classes,” they write. “Traditional insurance risk modeling relies on authoritative information sources such as national or industry data, but there are no equivalent sources for cyber-risk.” As a result, there is a very wide range of possible cost totals, depending on how the impact cascades through the economy. […]

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Fitch: Cybersecurity insurance market crossed billion-dollar earnings mark in 2016

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Insurers earned $1.35 billion from cyber insurance premiums last year, a 35 percent increase over the year before, according to new figures from the ratings agency Fitch. More than two-thirds of that total, about $921 million, was stand-alone cyber insurance; with $429 million being the estimated total premium value of package components or multi-risk insurance policies, which cover a variety of hazards. The total figure for last year “likely underestimates the industry’s cyber premium exposure due to the challenges inherent in breaking out cyber-related premium from other coverages in multi-line products,” states the Fitch report. The breakdown between stand-alone and packaged policies is very different than 2015, when the $998 million total coverage figure was almost equally divided between stand-alone and package premiums. The difference is accounted for by one insurer, AIG, changing the way it reports its business. In 2016, the company began classifying all of its cyber premiums as stand-alone business, as opposed to 2015, when it […]

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Insurance industry increasingly anxious about its own cyber risks

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Insurance companies are worried more than ever about cybersecurity, which is rated one of the top three risks the global industry faces for the first time in a recent survey. Insurance Banana Skins 2017, published last week by London-based think tank the Centre for the Study of Financial Innovation, is the sixth biennial survey of its kind, conducted with support from professional services firm PwC. The survey, of 836 insurance practitioners and observers in 52 countries, found growing levels of anxiety in the industry. Globally, the top 10 risks were rated as follows (with the rating from the last survey in 2015 in brackets): Change management (6) Cyber risk (4) Technology (-) Interest rates (3) Investment performance (5) Regulation (1) Macro-economy (2) Competition (-) Human talent (15) Guaranteed products (7) “The three highest risks form a cluster around the theme of technological change and industry response,” reads the survey report. “The top […]

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Only half of U.S. firms have cyber insurance, fewer than in U.K., Canada

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About half of U.S. businesses say they don’t have cyber risk insurance, compared to fewer than a third in the U.K. and Canada, and the health care sector is lagging the worst, according to a recent survey. The data, released by credit-scoring and data analytics giant FICO and market researchers Ovum, comes from a telephone survey of IT and security executives from a broad range of companies in the financial services, media, e-commerce and retail, telecommunications and health care sectors in North America and northwestern Europe. The 350 companies ranged in size from fewer than 1,000 employees (30 percent) to over 10,000 (25 percent) with nearly half of them (45 percent) somewhere in between. Half of U.S. businesses report having cyber insurance, although only about a third of those (16 percent of the whole sample) are confident that it covers all their risks. Just under a quarter more (23 percent) reported plans to buy insurance […]

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Analyzing Cyber Insurance Policies

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There’s a really interesting new paper analyzing over 100 different cyber insurance policies. From the abstract: In this research paper, we seek to answer fundamental questions concerning the current state of the cyber insurance market. Specifically, by collecting over 100 full insurance policies, we examine the composition and variation across three primary components: The coverage and exclusions of first and… Continue reading Analyzing Cyber Insurance Policies→

New insurance covers cyber risks for the wealthy

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Some of the wealthiest Americans can now expand their home insurance packages to include expert advice and technology for reducing their exposure to cyberattacks, as well as a variety of complimentary or reimbursable services if they do get hacked. AIG said it this week would be offering a “Family CyberEdge” product to existing customers of their Private Client Group, as an add-on to the home insurance packages it already offers. The Private Client Group caters to families with a net worth of more than $1 million and includes 40 percent of the individuals on the Forbes 400 list of the richest Americans. Its products are advertised as being suitable for “the most beautiful homes” and include packages for wine and art collections, as well as special services for people who own properties in multiple countries. The Family CyberEdge package includes a wide range of “risk mitigation services,” including an audit of personal mobile devices, home networks, wireless access points and social media, […]

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