Small- and medium-sized businesses (SMBs) represented about 45% of the cyber market exposure, a study by Guy Carpenter found.
In its latest cyber research report entitled “Small Businesses and the New Frontier of Cyber Catastrophe Modeling,” which was from its Cyber Center of Excellence, it was found that the number of SMBs recorded for cyber market exposure was a notable increase of 45% over the last five years.
The study said that the increased share of SMBs in the cyber insurance market meant that the accurate quantification of their aggregation potential was important to the capacity deployment as well as risk management.
In contrast to the overall SMB segment, the report found that those with cyber insurance coverage had strong security postures. This meant that incorporating the security posture gap into cyber modeling analysis is vital to accurately quantify the appropriate aggregation risk for the portfolio.
However, because there is a notable lack in credible data, cyber catastrophe (CAT) models struggled in reflecting the disparities of cybersecurity postures when it comes to SMBs.
As the adjustment of CAT model outputs in order to reflect the impacts of fundamental security controls leads to a more accurate and precise differentiation of SMB risk, model adjustment serves as an important step when it comes to establishing a view of modeled loss potential, which can support the growth in a market segment that is set for a continued expansion.
The “Small Businesses and the New Frontier of Cyber Catastrophe Modeling” report was developed by cyber insurance provider At-Bay and discussed the impact of cyber on SMBs, suggesting actionable solutions when it comes to modeling, data, and impact mitigation.
At-Bay was awarded as one of the winners for the top insurtech companies. Read the full report here.
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