Increased sophistication and volumes of cyber attacks, as more and more companies and government leverage online IT systems, are causing a headache for a range of stakeholders — from the companies themselves, to their insurers. In a bid to improve the understanding of risks within a rapidly changing environment, with little historic data, Guy Carpenter and Symantec have joined forces to develop a cyber aggregation model.
The threat of cyber security has increased over the past years as new systems and technologies open up new vectors for illicit gain. Last year there were an estimated 500,000 cyber security incidents per day, with a total cost amounting to more than $400 billion over the year. Insurance companies are increasingly developing propositions for businesses that find themselves the dupe of cunning adversary within the realm of their IT system. While private and public companies bear the brunt of attacks, governments and their institutions are also under considerable threat, including electric grids, telecommunications networks, dams, transportation systems, chemical plants and civilian nuclear facilities.
Developing a clear understanding of the risks for businesses and government with little historical trend, in diverse sectors, and in a rapidly changing technology environment, is a key concern for the insurance industry — whose profitable existence depends on them getting the risks right.
Guy Carpenter, one of Marsh & McLennan Companies’ subsidiaries, provides clients with reinsurance broking expertise, strategic advisory services, and analytics support. In a bid to bolster its suite of cyber services, the firm's Cyber Solutions Specialty Practice has formed a partnership with one of the world’s largest cyber security companies, Symantec Corporation. Symantec, a Fortune 500 company, produces software for security, storage, backup and availability – and is the most-used certification authority.
The new partners will work together to develop a cyber aggregation model. The model will “include a comprehensive catalogue of cyber scenarios from which insurers can derive frequency and severity distributions to measure the potential financial impact of loss from both affirmative cyber coverages and “silent” all-risk policies where cyber is the peril, but no cyber exclusions exist.”
The collaboration between the new partners will lever their twin analytics capabilities as well as broad cyber security knowledge and big data bases, in a bid to rapidly develop the insurance industry’s most advanced cyber aggregation model.
Tim Gardner, CEO of US Operations at Guy Carpenter, says “By combining Guy Carpenter’s risk management and catastrophe modeling expertise with Symantec’s technical knowledge and proprietary data, we are pioneering a cyber aggregation model to help reinsurers gain a better understanding of their correlated cyber risks and to manage and protect their capital in extreme cyber scenarios.”
Roxane Divol, Senior Vice President and General Manager at Symantec, remarks “Symantec’s cybersecurity data and analytics, combined with Guy Carpenter’s deep knowledge of the emerging cyber reinsurance market, will give our insurance customers a better understanding of the most damaging cyberattacks.”