A collaborative effort by global reinsurance brokerage Guy Carpenter and CyberCube analytics has examined the potential financial impact a large-scale cyber attack could have on the standalone cyber insurance market as it exists today.
By analysing 23 loss scenarios on CyberCube’s modelling platform, it was determined that a widespread data loss from a leading operating system provider would have the potential to cost the sector $23.8 billion.
Meanwhile, a large-scale data loss from cloud services provider could have a financial impact of $22.2 billion.
“Insurers and the organizations they insure need to be aware of these major scenarios, and understand the response plans necessary and the potential financial losses in each of these scenarios,” explained Rebecca Bole, Head of Industry Engagement, CyberCube Analytics.
Siobhan O’Brien, Cyber Center of Excellence, Guy Carpenter, also commented: “In our recent joint study, we analyzed all 23 catastrophe loss scenarios on CyberCube’s platform, which range from attacks on critical infrastructure to third-party technology aggregation scenarios to attacks that affect the cloud environment. We focused on the five that drive the highest loss values.”
O’Brien added that by understanding risk tolerance and capital commitment, primary carriers can also ensure that they have purchased enough reinsurance capacity in a structure that best protects against these events.
Also modelled was a widespread theft from a major e-mail service provider, which was estimated to inflict up to $19.1 billion in losses.
Erica Davis, Cyber Center of Excellence, Guy Carpenter, further stated: “The cyber market must further develop by increasing buyer penetration, assisting businesses to understand and measure their cyber exposures, and continuing to expand the product so it bridges cyber protection gaps across lines of business in order to help the (re)insurance industry to sustain the full potential impact of these economic losses.”