Broker, modeller search for hidden cyber risks
Catastrophe modeller AIR Worldwide and global reinsurance broker Capsicum Re are working together to counter the impact of “silent cyber incidents” on non-cyber related lines of insurance.
Silent cyber incidents are potential cyber exposures contained within traditional property and liability insurance policies, which may not implicitly include or exclude cyber risks.
Some older commercial policies don’t specifically refer to cyber and could theoretically pay claims for cyber losses.
The two firms will identify which non-cyber lines of business are more likely to be exposed to silent cyber-related losses, and use that to develop models that simulate the impacts.
Prashant Pai, the VP of Cyber Offerings at AIR Worldwide parent company Verisk, says the insurance industry could face higher loss ratios if cyber-related exposures are not identified during the underwriting process.
Capsicum Re has adopted AIR’s cyber risk modelling and analytics platform ARC, which will host the models simulating cyber-related impacts on policies.