logo image

My colleague Andrew Coburn recently co-authored an article on Cyber Risk with Simon Ruffle and Sarah Pryor, both researchers at Cambridge University Centre of Risk Studies.

This is a timely article considering the cyber attacks in the past year on big U.S. corporations. TargetHome DepotJPMorgan and, most recently, Sony Pictures have all had to deal with unauthorized security breaches.

This isn’t the first time Sony has experienced a virtual assault. In 2011, the PlayStation Network suffered one of the biggest security breaches in recent memory, which is reported to have cost the company in excess of $171 million.


Image source

Cyber attacks can be costly and insurers are hesitant to offer commercial cyber attack coverage because the risk is not well understood.

Andrew and his co-authors contend that insurers are not concerned with individual loss events, such as the targeted security penetrations we’ve seen recently on Sony and JP Morgan. It’s whether individual loss events are manageable across a whole portfolio of policies.

The biggest challenge in evaluating cyber risk is its inherent systemic complexity and interconnectivity. The internet, the technology companies that run on it, and the enterprises they serve are inextricably intertwined; shocks to one part of a network can quickly cascade and affect the rest of the whole system.

Can catastrophe-modelling methodologies provide the solution? Read the full article in The Actuary here.

You May Also Like
tsunami timeline
December 18, 2014
A Decade Later – Reconsidering The Indian Ocean Earthquake and Tsunami
Alexia Russell
Alexia Russell
Corporate Communications, RMS


Alexia is a member of the RMS corporate communications team. She is responsible for public relations and influencer relations with a specific focus on developing communications strategies that help to advance RMS’ efforts to increase the world’s resiliency to catastrophe risk.

Alexia has more than 14 years of experience managing public relations for financial services companies, including Moody’s, Genworth Financial and GE Financial Insurance. She joined RMS in 2012 and is based in London.

cta image

Need Help Managing Your Portfolio?

close button
Overlay Image
Video Title

Thank You

You’ll be contacted by an RMS specialist shortly.