Catastrophe modeling firm AIR Worldwide (AIR) announced it is collaborating with reinsurance broker Capsicum Re to enhance the insurance industry’s modeling of what many refer to as “silent” cyber incidents.
As part of the collaboration, the two firms will identify which non-cyber lines of business and industries are more likely to be exposed to silent cyber-related losses. The result of this collaboration is expected to expand the availability of models that simulate the impact of incidents that could cause silent cyber-related losses, said Boston-based AIR in a statement.
AIR is expected to continuously announces data on cyber risk to inform the cyber risk models and conclude with the addition of Capsicum RE’s expertise, models that provide unique information to identify and evaluate silent cyber risks.
“Certain insurance policies that do not include or exclude cybercrime risks in a policy statement may have silent cigarette exposure,” said Prashant Pai, vice president of Cyber bidding for Verisk, parent company of AIR. “As a result, it is possible for the insurance industry to face higher losses than expected, if the risks associated with cyber events are not accounted for during the mandatory accounting period,” he said.
“There are many uncertainties surrounding cybercrime risks, and they can lead to loss of property, professional, maritime and other non-cigarette business lines,” says Scott Stransky, vice president and vice president of emerging risk modeling at AIR. “The model we have developed with Capsicum Re can help the insurance industry to properly assess and measure silent cyber risks.”
“Considering the rapidly developing nature of cigarette smoking, there is always a high probability of keeping up with insurance policy statements, and some silent quiet cyber risks may always be present,” says Capsicum Re. “Our goal is to better advise the insurance companies and reinsurers about the nature of the siberian riskin and to help them develop innovative risk transfer solutions that really reflect the risk of the industry’s underlying risk.”
“Quiet cyberspace is an increasing area of concern, and the market is exploring different ways to measure quantitatively,” said Justice Pikinska, Capsicum Re actress. It is widely discussed by the actuarial community and we see a significant increase in demand for special models that will be developed both as determinist and as stochastic. With AIR we have a great opportunity to develop a reliable probability model to evaluate the average volatility and the likelihood of extreme cyber events. “
Capsicum Re said that AIR is adopting the cyber risk modeling and analysis platform (ARC), which includes a wide variety of cyber scenarios and models to help provide sophisticated information to insurance brokers.
Silent cigar models are expected to be available in upcoming ARC releases and in the broker service of Capsicum RE. AIR now offers deterministic modeling capabilities for the cyber risks present in the ARC. AIR offers probabilistic modeling capabilities for cybercrime through bespoke consulting services. It is expected that the probabilistic modeling will be built in the general availability (GA) version of the ARC later this year.
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