With aggregation of risk at the top of most cyber insurers’ minds, a new alliance between Guy Carpenter & Company, LLC, and the cybersecurity specialists at Symantec Corporation will aim to provide a risk model that measures frequency and severity of cyber events and the possible financial impact on not only cyber policies, but also traditional coverage with no cyber exclusions.
Guy Carpenter announced this week that it has launched a Cyber Solutions Specialty Practice, focused on cyber reinsurance. Symantec will provide analytics and cybersecurity expertise.
Both firms commented that cyber attacks carry the potential to cost organizations “as much as $400 billion a year” in the aggregate. Insurance industry observers have stated that teaming up with cybersecurity experts will allow the industry to get a better handle on the type of risks faced by businesses.
“The systemic nature of the risk means (re)insurers can suffer losses from multiple insureds across vast geographies from a single event, exposing infrastructure, supply chain, and other interconnected risks. In the wake of the cyber attack on the Ukrainian power grid in late 2015, (re)insurers are attempting to model, and assess the aggregation risk of, potential attacks on critical infrastructure, including electric grids, telecommunications networks, dams, transportation systems, chemical plants and civilian nuclear facilities,” noted Guy Carpenter and Symantec in a joint statement.
The team at Symantec explained the goals to Advisen in an email, commenting, “Measuring and managing aggregation risk for cyber risk is an important problem facing insurers today. While it’s common to measure aggregation risk and manage (re)insurance portfolios in the industry to hedge against earthquake, hurricane and terrorism risk, we have yet to see a robust solution backed by data, intelligence and expert insight for cyber risk.”
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Erin is the managing editor of Advisen’s Front Page News. She has been covering property-casualty insurance since 2000. Previously, Erin served as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at [email protected].
