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Formerly Moody’s RMS

Flood risk is one of the most severe natural hazards in the United States, yet maybe it is one of the least well-managed, and least understood by insurers. It is not surprising that many insurers have chosen to stay on the sidelines of the U.S. flood insurance market, which has been dominated for more than 40 years by the state-backed National Flood Insurance Program (NFIP).

But slowly, the hurdles to private sector involvement are starting to clear, through the combined efforts of the industry, FEMA, and even private citizens. It will be an exciting time for private insurers and Americans if the new flood reform bill, H.R. 2874 passes through the Senate, as measures in the bill include increased acceptance of private flood insurance by mortgage providers, easing of fixed claims limits, and open source access to FEMA’s extensive claims database.

The bill even attempts to open up the creation and definition of FEMA flood zones — a key determinate in whether an area falls under the NFIP or not, to local government and communities. This could encourage communities to assess the flood risk in their area and take action, to propose mitigation activities that will reduce the impact of flood for a community.

The potential of more data being released by FEMA is exciting too, as is the promise of modeling which will give insurers the granular, detailed insight that they need to move forward in the private flood market.

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A Texas National Guardsman carries a resident from her flooded home following Hurricane Harvey in Houston, Aug. 27, 2017. Image credit: U.S. Army National Guard photo by Lt. Zachary West

When it comes to flood, there is just so much to talk about. To discuss what this shift in the flood market could mean for insurers down to policyholder level, the impact of events such as Hurricane Harvey and the Houston floods, through to modeling developments and changes in legislation, Property Casualty 360 will be hosting #PC360Flood , a“Flood Insurance Live” Twitter chat thisWednesday, March 14from 1 pm to 2 pm Eastern Time (ET).

There will be an esteemed panel of experts who will be ready to answer your flood insurance related questions, including:

  • Joshua Woodbury, Flood Specialist at Swiss Re @SwissRe
  • Craig Poulton of CATcoverage.com @NCIPtweets
  • Matt Nielsen, Senior Director, Global Governmental and Regulatory Affairs at RMS @MattN_RMS
  • Holly Widen, Product Manager and flood expert at RMS @hmwiden
  • Cliff Roberti, Principal at Federal Hall Policy Advisors LLC@cliffroberti
  • Christine Barlow CPCU, author of the forthcoming book “Commercial Flood Insurance Coverage Guide @FCSBulletins
  • John Dickson, President of NFS Edge Insurance Agency, Inc., a subsidiary of Aon National Flood Services (NFS)@NationalFlood
  • Michael Brown, Vice President and Property Department Manager at Golden Bear @michaelbmodesto

I hope you can join us for #PC360Flood, and as a follow-up, I will post a chat blog that captures all the interesting tidbits from the conversation.

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October 30, 2019
Cyber Risk Under the Spotlight: RMS and NetDiligence #ChatCyberRisk

The Twitterverse got its chance to pose cyber risk questions to a panel of distinguished experts at the NetDiligence® Cyber Risk Summit in Santa Monica on October 16. RMS and NetDiligence teamed up to host a live #ChatCyberRisk Q&A session at the conference. The experts on hand included Vinny Sakore, Chief Technology Officer, NetDiligence; Russell Thomas, Principal Engineer – Cyber, RMS and Christos Mitas, Vice President – Model Development, RMS. Which cyberattacks will grow in prominence? Vinny Sakore sees more and more attacks against individuals – especially high net worth individuals, with personal cyber insurance coverage becoming an important issue in the future. And the biggest driver of cyber risk for organizations? Russell Thomas stated that the main ones remain; contagious malware (including ransomware) and data theft/exfiltration will continue to be the most prominent types of attacks with potential for severe or catastrophic loss to victims. The number of attacks will also grow as more firms, government organizations, schools, etc. become more dependent on automated processes and e-commerce. Financial risk due to business interruption stands out as the immediate risk driver; in a 2018 survey of 1,300 global companies, 34 percent of companies reported business interruption due to cyberattack. Whether the biggest threat is a data breach, malware, or something else, is largely sector dependent. For an e-commerce firm making its money on the web, DDoS or cloud outage can be catastrophic. For large financial services firms, both data breach and contagious malware are big drivers. For the largest and rarest loss events, risk drivers for large banks would be large-scale cloud outage (malicious or not) and SWIFT-type financial theft by advanced threat groups. And although not fully mature, cyber-physical attacks are increasing in prominence. Russell added that threat actors will start to use cyber-physical attacks to either make money or achieve political goals. Also, the scope and scale of these attacks could change, with the potential to increase dramatically, dependent on threat actor capabilities, goals, and strategies. The larger risk to all companies from this is a major infrastructure outage.  Malware Evolves One of the main threats – malware, continues to evolve, and the panelists looked at the forces driving this evolution. Christos Mitas from RMS saw a continued “spill-over” and collaboration between state-sponsored and cybercrime groups, also the availability of packaged malware toolkits and “malware-as-a-service” for less-skilled actors. The ease of deploying malware kits is lowering the threshold for the “bad guys” to start a cyberattack. Advanced threat actors are now chaining together multiple malware sets (e.g. banking trojans) and repurposing to carry out new types of attacks, e.g. large financial thefts, industrial control systems. Vinny added that due to the successful monetization of ransomware attacks he does not foresee a decline in ransomware but continued growth.   Russell Thomas suggested that we are living in a target rich environment, a combination of many vulnerabilities together with immature defenses. There is the homogenization of deployed software, and an attack surface expanding dramatically due to the Internet of Things (IoT), in critical applications such as medical, automotive, etc. He added that security by design is still not yet widespread. Currently, not many threat actors focus on cyber-physical attacks, given their goals (monetary, intelligence, geopolitical) but this could quickly change if a few more “puzzle pieces” fall into place. Vinny Sakore stated an example earlier this year as the DHS and the FDA alerted cardiologists, hospitals, and patients that hundreds of thousands of implanted defibrillators, programmers, and heart monitors could be hacked. The fight back against cybercrime also evolves. Russell Thomas was asked how public and private sector groups are partnering to stop cybercrime. Russell stated that there have been many collaborations over the last ten years around standards, data sharing, but with the landscape changing so fast, there is always more to be done – such as the rise of e-commerce or IoT. Some issues seem outside of these efforts, such as “hack-back” or inter-government cyber conflict. Vinny Sakore cited the National Cyber Forensics and Training Alliance (NCTFA) as a great example of public-private groups working together, and he suggested that informally, forensic cyber firms collaborate with law enforcement such as the FBI. And how could cyber risk models support a stronger understanding of how to manage evolving cyber risk? Christos Mitas reminded attendees to align models with decisions. Cyber risk models, especially financial modeling, are best for big decisions like resource allocation, IT and business architecture., policy decisions, etc, but maybe not so good for low-level “which vulnerability should we patch” decisions. Cyber risk models such as RMS Cyber Risk Solutions enable regular updates to track trends and apply them for effective management of cyber portfolios of subjects at risk. Wrapping up the chat, Vinny Sakore looked to the future and asked how we can make a real step-change in tackling cyber risk. He raised the example of irrigation systems that were revolutionized by creating models based on sensor data. Vinny asked us to imagine what we could do by mining endpoint data from devices and servers, and as Professor @alexstamos from Stanford University and a former CISO at Facebook reminds us …”breaches are like hurricanes, we can’t stop them but we can figure out how to survive them.” View the whole #ChatCyberRisk conversation here, and to find out more about RMS Cyber Risk Solutions, click here.…

October 11, 2019
What the Hack? Your Chance to Engage with a Cyber Risk Expert

If you are a business insurer, then your clients are typically being exposed to cyber risk. As RMS has discussed previously in our 2019 Cyber Risk Outlook, the digital economy has become more pervasive and now accounts for almost a third of the GDP of developed countries, and e-commerce now represents 14 cents in every U.S. dollar spent in retail. The “attack surface” vulnerable to cyber risk expands as more and more business devices are being connected to the Internet, with technologies become more standardized, homogenized, and cloud dependent. So, it’s never been more important to understand the cyber risk landscape, whether you are a dedicated affirmative cyber insurer or exposed to “silent-cyber” – where potential cyber-related losses stem from traditional property and liability policies not specifically designed to cover cyber risk. From data exfiltration, contagious malware and financial theft, through to the risk of cloud outage and DDoS attacks, perpetrated by threat actors ranging from financially motivated criminals to state-backed groups, you need to know the types of cyberattack and who’s behind them. We have an opportunity for you to pose your cyber risk questions to a panel of distinguished experts who all are helping the insurance industry to understand this pervasive threat and to take advantage of growth opportunities for cyber insurance. The NetDiligence® Cyber Risk Summit is being held in Santa Monica (October 15-17) and is attended by hundreds of cyber insurance, legal/regulatory, and technology leaders from all over the globe, with two full days of panel discussions by leading cyber experts who share their insights on hot topics, trends, and cybersecurity concerns. On Wednesday, October 16, RMS and NetDiligence are teaming up to host a live #ChatCyberRisk Q&A session at the conference (1-2 p.m. Pacific Time), featuring experts including: Vinny Sakore: Chief Technology Officer, NetDiligence Russell Thomas: Principal Engineer – Cyber, RMS Christos Mitas: Vice President – Model Development, RMS This distinguished panel will be sharing their thoughts on the evolving threat landscape, including: The role of historical cyber data for quantifying future risk Evaluating effective cyber risk mitigation programs Major risk drivers for corporations, municipalities and (re)insurance We invite you to join the discussion and share your thoughts with the experts from RMS and NetDiligence. How Do You Do This? Simply go to the @RMS or @NetDiligence Twitter page. Search for #ChatCyberRisk and #CyberRiskSummit to follow the conversation. When offering your response or asking questions, add in #ChatCyberRisk and direct it to @RMS. We hope to see you in the Twitterverse!…

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Devonne Cusi
Public Relations Manager

Devonne works as a Public Relations Manager for the Americas, responsible for ensuring communications about RMS research, solutions and services reach target audiences and stakeholders across the Americas and the Caribbean.

She is based at the RMS office in Hoboken and has a background in business-to-business communications for the insurance and financial, real estate, and technology sectors. Devonne holds a bachelor’s degree in American Studies from George Washington University.

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