Property Claim Services (PCS), a subsidiary of the data analytics and risk assessment firm Verisk, has announced enhancements to its Global Cyber Index service including coverage for catastrophic cyber events, and industry-wide insured losses of over $250 million.
The improved product is now available for existing PCS Global Cyber users, addresses events with multiple insureds, and accounts for both affirmative and silent cyber.
“There’s no one correct approach to managing risk and capital in the face of a growing cyber threat,” commented Tom Johansmeyer, Co-Head of PCS.
“The latest iteration of PCS Global Cyber helps risk-bearers address any silent exposure they may have lurking in their portfolios while also taking an active approach to the cyber business they purposely write.”
The service goes live with an industry loss for the 2017 Petya/NotPetya event and will add future events as they arise.
These addition to PCS Global Cyber enables reinsurers and other stakeholders in the global risk and capital supply chain to gain access to a broad and unbiased view of global cyber catastrophe events.
Additionally, clients can use the index to facilitate reinsurance and alternative risk-transfer transactions.
“We believe that the prevalence of affirmative or silent cyber risk will fluctuate in the years to come as the market evolves and losses occur. So, rather than take a view that one approach will emerge, the PCS team has worked closely with the market to develop a loss index suite that will serve the market as cyber continues to evolve,” added Johansmeyer.
Aritra Chatterjee, Chief Underwriting Officer for Envelop Risk, said, “The industry has so-far struggled with converging to a standard cyber event definition, which is often difficult to achieve without an independent third party opinion on what constitutes an event and the quantum of it. With PCS filling the gap, several possible structures can be offered in the reinsurance market. We are excited about this opportunity.”
PCS Global Cyber has estimates for 13 affirmative events, with seven coming since the launch of the service a year ago. The full historical database is complete and ready for use, as is the process for developing future estimates.
Chief Executive Officer at Radius Specialty Limited, Rob Ashton, explained, “Few, if any, other perils are being approached in the same way as non-affirmative cyber; affording coverage for a known multi-disciplinary peril, that is growing in potential severity almost daily, yet with limited information available to underwriters that would allow them to price the risk, manage accumulations and hedge their downside.”
“As such, it is one of the most salient emerging threats to the global Insurance market. As a capacity seller we see buyers express interest in potential risk transfer solutions, yet deal completion is slow and sporadic.”
“However, as management, regulators and rating agencies start to scrutinise these risks more closely and have a better understanding and more granular view of projected ultimate loss including the non-affirmative side from PCS, we expect this will change quite dramatically over the next 18 months.”
David Flandro, global head of analytics, JLT Re, stated, “PCS have taken a pioneering step forward in their construction of a cyber catastrophe loss index. JLT Re are very excited to partner with PCS in its journey to bring greater clarity in respect of both affirmative and silent cyber claims. We are confident that this will represent an important milestone for the industry.”