Silent cyber, or the embedded cyber coverage in non-specific cyber policies, is now accounted for in Willis Re’s updated cyber risk portfolio modelling tool PRISM-ReTM.
The upgraded version of the management tool incorporates the likelihood of a loss resulting from silent cyber, overlaying it against client-specific non-cyber limit profiles and loss severity curves in order to come up with a full loss distribution for silent cyber loss potential.
Willis Re, the reinsurance business of brokerage giant Willis Towers Watson, derived the likelihood of loss from its 2017 silent cyber survey. The study involved around 750 insurance professionals and focused on the extent to which the cyber aspect of exposure would increase the likelihood of a covered loss to various industry segments in the property, other liability, auto, and workers’ compensation lines of business.
One example cited by the reinsurer is a cyberattack on an industrial plant’s control system which causes a boiler explosion and, in turn, leads to extensive property damage and business interruption. Willis Re noted how silent cyber events are capable of raising loss rations on policies not specifically designed to cover cyber risk.
“Our model can now generate a full probabilistic frequency and severity loss distribution for silent cyber loss potential in isolation or in conjunction with affirmative cyber, and allows insurers to monitor changes in cyber exposure composition at different probability levels,” explained Willis Re head of cyber modelling Jess Fung. “We believe it will further improve the ability of our clients to model and manage the large and growing cyber threats that we face.”
Mark Synnott, global cyber practice leader at Willis Re, said the tool provides a comprehensive assessment of insurers’ exposure to cyber loss, allowing them to quantify and protect their overall portfolios.
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