How Cyber Model Vendors See Their Role in Closing the Cyber Insurance Protection Gap

The developers of models for quantifying systemic cyber risk for the re/insurance industry have had little opportunity for their voice to be heard. Instead, the historical literature largely dismisses the sector as immature, inaccurate, and not up to the task of facilitating cyber re/insurance risk transfer. This characterization of the cyber modeling community may be true, but little evidence has been offered in support of such views. Further, no credible scholarly analysis of the effectiveness of cyber vendor models has been conducted. This article offers a first step in what hopefully can become a much richer and robust line of inquiry across the cyber re/insurance academic community. Consisting of qualitative research with cyber modeling vendor employees, this article offers a baseline view of how the modeling sector sees itself and its work with regard to the broader cyber re/insurance community. No such study of the model vendors themselves has been conducted. This article provides an opportunity for the modelers to say their piece in a sector that has largely overlooked their contributions

How Bad Can Systemic Cyber Get?

What does a comparison of the scale of natural activity data to cyber event data suggest about the risks that cyber could pose to the global insurance market? 1. The prospective scale of systemic cyber has largely relied on hypotheticals 2. Many believe that “the big one” has yet to come, albeit without supporting evidence 3. Natural disaster losses suggest that the potential quantum for systemic cyber may be much lower than many fear, given the wide disparity seen during peak years of cyber risk (1999-2004) 4. Although there is no direct correlation between natural disaster and cyber economic losses, the sheer magnitude of the former (and attendant insurance market activity) suggests that a smaller and declining magnitude of economic threat in the latter speaks not just to insurability but also remoteness of ris