RMS Cyber Accumulation Management System Licensed by QBE Insurance
QBE will gain insights into existing exposures across multiple lines, enabling the company to grow a sustainable cyber portfolio
LONDON, U.K. -
January 03, 2017 -
RMS, the world’s leading catastrophe risk management firm, today announced that QBE Insurance Group (QBE) has agreed a multi-year deal to license the RMS Cyber Accumulation Management System. The move will enable QBE's growing cyber business to model a range of potential cyber catastrophes to determine the potential impact of a wide-scale systemic attack.
Cyber risk has the potential to impact not just specific cyber policies, but also multiple other policies, for example marine or property. The breadth of loss process models included in the RMS Cyber Accumulation Management System will enable QBE to identify and manage its potential cyber risk accumulations in its portfolios, and so support the growth of QBE’s resilient and diversified cyber business.
Christer Pehrson, managing director of client development at RMS, said: "Accumulations of cyber risk are hugely complex and not geographically limited, unlike perils such as hurricanes or earthquakes. The web of potential impacts and losses is enormous and insurers are increasingly concerned about the growing accumulation of risks within their cyber insurance business. The RMS Cyber Accumulation Management System will enable QBE to understand and control this accumulation to maximize the opportunity provided by cyber as a new line of business."
As yet, there have been no cyber catastrophes. So the limited historical precedent for this peril makes it particularly challenging for insurers to set their capacity levels. Without the valuable insights into the extreme, but plausible, cyber events provided by the Cyber Accumulation Management System many insurers have to assume a conservative view of risk as they are unable to set the Probable Maximum Loss for cyber catastrophes. This can limit growth of this potentially profitable line of business, as well as the efficient management of a firm’s capital.
Eric Letourneau, senior vice president and group head of catastrophe modeling at QBE, said: “Cyber has the potential to trigger a correlated loss across many accounts. Therefore, a deep understanding of its systemic risk and the consequent impact on our interconnected world is critical to managing the risk. QBE’s objective is to manage cyber exposures within a well-defined risk appetite, similar to established practices for property accumulations. The RMS Cyber Accumulation Management System helps us address the significant challenge of aggregate cyber risk and we are excited about its future roadmap.”
The RMS Cyber Accumulation Management System incorporates its open source data schema which provides a common approach for capturing exposure. This data schema is increasingly being adopted as the market standard for cyber exposure with more than 20 cyber insurers now using it. The RMS Cyber Accumulation Management System also streamlines regulatory reporting, reducing insurers’ overheads.
Notes to Editors
The RMS Cyber Accumulation Management System was developed in collaboration with eight forward-thinking cyber insurers and the University of Cambridge's Centre for Risk Studies. It is continuously updated with the latest developments in cyber threat landscape, the regulatory environment and mitigation steps taken by companies and governments.
RMS solutions help insurers, financial markets, corporations, and public agencies evaluate and manage catastrophe risks throughout the world. RMS has over 1,200 employees across 13 offices in the US, London, Bermuda, Zurich, India, China, Japan, Singapore and Australia - our products and models covering six continents.
We lead an industry that we helped to pioneer—catastrophe risk modeling—and are delivering models, data, and risk management solutions on the RMS(one)® platform to transform the world’s understanding and quantification of risk through open, real-time exposure and risk management.
More than 400 insurers, reinsurers, trading companies, and other financial institutions trust RMS solutions to better understand and manage the risks of natural and human-made catastrophes, including hurricanes, earthquakes, floods, terrorism, and pandemics.