Christopher Keegan
Chris Keegan admits to some level of anxiety when he walked into a meeting with a major company–the victim if a high-profile data breach–to show them Beecher Carlson’s cyber loss model, CyberSelect.
“I knew we had a great team who did the right research and analysis, and had a great product,” Keegan, Beecher Carlson’s National Cyber Liability Practice leader, told Advisen. Keegan said he punched in the company’s breach numbers and a probable maximum loss amount was displayed as well as line-by-line amounts for items such as forensic costs, damages, fines, remediation and payment card replacements.
“They looked and said, ‘You’re close,’” continued Keegan. “The reaction was positive and it’s remained very positive. We’ve gotten great feedback.”
CyberSelect is the product of research with forensics firms, attorneys and banks to assess the impact of breach on a company in possession of either, or any combination of, personal health information, personal identifiable information or payment card records. Upon filling in these three fields, the model can be used to establish a better understanding of potential losses broken down by each aspect of the loss.
“It is a great tool to get clients to think about exposure-planning,” said Keegan, adding that general counsels, CISOs or CFOs–whomever takes the risk to the executive board–can get comfortable with recommendations for coverage. The model can be used to segment exposures at different locations or divisions of a company, and it can differentiate between centralized and distributed networks.
Keegan said CyberSelect Loss Model can lead to discussions about top-end loss estimates and the average insurance purchase for similar risks.
The model has already provided some interesting feedback. Keegan said it allowed Beecher Carlson, a large-account risk management broker, to find that costs per record are higher for smaller breaches. Generally, costs diminish at different rates as the breaches get larger. For instance, Keegan told Advisen that it appears forensics cost top out at $10 million.
Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
