Cyber
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Developing brand new and innovative solutions for the insurance industry is a rare and exciting opportunity. At RMS, we are modelling the physics and dynamics of cyber risk, so this line of business can grow prudently and profitably.” - Dr. Christos Mitas, Head of RMS' Cyber Risk Modelling Group |
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Maximizing Cyber Insurance
Opportunities by Minimizing Uncertainty
Cyber insurance continues to be a strong performer in a challenging market cycle, providing consistent top-line growth at a time when little is available. However, it has also been shown to be a systemic peril, requiring insurers to appropriately account for the catastrophe risk, to ensure this growth turns into long term sustainable profit.
To that end RMS have developed a leading cyber catastrophe model, working with partners across Academia, Cyber-Security and the Insurance Industry, to quantify cyber risk to both affirmative and silent cyber, and help insurers unlock this huge market opportunity.
The RMS v4 Cyber Model was released in October 2019, bringing with it extensive research into the underlying casual processes that underpin cyber risk. RMS is also leveraging hundreds of millions of data points – generated through RMS’ proprietary data collection techniques to inform and calibrate our models. This release also provides expanded exposure data enrichment capabilities on 13M companies worldwide, leading to improved model accuracy.
A Common Data Standard
A key foundational component of the cyber model is the RMS Cyber Exposure Data Schema. In partnership with the University of Cambridge Centre for Risk Studies, this opensource data structure helps (re)insurers capture exposure data at a reasonable level of detail representing the cyber risk of an insured company. The schema provides a common syntax for organizing and measuring affirmative and silent cyber exposures, facilitating risk transfer across the industry.
Cyber Loss Process Models
RMS Cyber Solutions uses a multi-dimensional assessment to identify and quantify key risk variables that determine the frequency and severity of cyber-attacks. Through assessing threat-actor groups, human and outside-in vulnerabilities, digital assets at risk and historical losses, our model can help unlock your full cyber potential and ensure long-term profitability.
RMS models a range of cyber events including those impacting a company’s digital assets (such as data and e-commerce), and those that target operational technology (such as industrial control systems). These risk models allow insurers to quantify the impact of these events, to ensure adequate premiums are charged and appropriate capital is reserved.
Open Analytics Platform
RMS Cyber Solutions provides a framework for analysing exposure and loss results across affirmative and silent cyber insurance policies. The platform leverages the market leading RMS financial model to accurately represent policy terms and conditions, both at the primary and reinsurance levels. The new user interface provides a streamlined approach to data management and seamless access to analytic insights – with open access to all the underlying modelling assumptions and data.
RMS enables (re)insurers to:
- +Define growth strategies and business planning, including product design
- +Support risk selection and underwriting decision making
- +Set an appropriate technical price
- +Assess premium adequacy, including cat loading
- +Allocate risk capital
- +Optimize reinsurance purchasing
