In my thirty-plus years working with insurers, this is one of the few genuinely new lines of business that could generate tens of billions of dollars for the industry.

- Peter Ulrich, RMS Senior Vice President and Head of Emerging Risks Division


Maximizing Cyber Insurance Opportunities
by Understanding Cyber Accumulation Risk

Cyber risks are among the biggest threats facing businesses today, which makes mitigating cyber risk a top business priority. While cyber represents a fundamental growth driver for the global (re)insurance industry, quantification of this risk is still in its infancy.

To grow, insurers need to understand the attritional losses and the potential for risk accumulation, a difficult task without a common data standard or mechanism for understanding aggregations of risk. To assist, RMS released a Cyber Accumulation Management System (CAMS) in February 2016 that provided a common exposure data standard, as well as the first models understanding aggregations of risk. This system was adopted across the market by many leading cyber writers.

In May 2017, RMS released our second-generation cyber modeling system, which is the culmination of 14 months of extensive research and development into cyber risk and its underlying components. This update offers significant enhancements to the IT cyber risk models and provides new insights into a suite of potential cyber-physical events.

A Common Data Standard

In partnership with the University of Cambridge Centre for Risk Studies, the RMS Cyber Exposure Data Schema offers a standardized approach for identifying, quantifying, and reporting affirmative and silent cyber exposure. This open data standard provides the common language and approach needed for understanding and measuring cyber accumulation risk.

Cyber Loss Process Models

Defining a Probable Maximum Loss (PML) for cyber insurance is challenging with the absence of a truly systemic “catastrophe” loss. RMS has created a series of risk models to stress test a (re)insurer’s portfolio. They reflect the key IT-related cyber threats facing insurers, along with a suite of cyber-physical stress tests. These risk models allow insurers to explore plausible examples of systemic cyber catastrophes that impact insurers.

Open Analytics Platform

The RMS® Cyber Accumulation Management System application provides a framework for analyzing exposure and loss results across affirmative and silent cyber insurance policies. The new user interface provides a streamlined approach to data management and seamless access to analytic insights.

RMS CAMS enables insurers to:

  • +Set and monitor risk appetite over time
  • +Drill into drivers of cyber risk
  • +Visualize expected loss baseline to benchmark claims against industry
  • +Identify and quantify cyber-physical exposure and risk
  • +Respond to regulatory reporting requirements

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