CyberCube has updated its analytic software to enable insurers to quantify losses to scenarios that Lloyd’s of London has issued to syndicates for the upcoming March data collection deadline. These scenarios are used to report to Lloyd’s on how syndicates’ portfolios would be affected by major cyber events.
CyberCube has introduced three scenarios for realistic cyber disasters as part of its Portfolio Manager product, the company said. The scenarios, designed in conjunction with Lloyd’s underwriting team, Lloyd’s market practitioners and Guy Carpenter, are:
- A cloud outage
- A power or infrastructure outage
- A major malware attack
The Lloyd’s Market Association’s Cyber Risk Strategy Group was also heavily involved in the development of the scenarios, CyberCube said.
The Lloyd’s market can assess each syndicate’s financial resilience – and that of the market as a whole – by analysing how their portfolios of insurance risks would be affected by the scenarios, CyberCube said. The three cyber scenarios will be included in Lloyd’s formal Realistic Disaster Scenario (RDS) framework going forward.
“Lloyd’s syndicates have long been leaders in the global cyber insurance market, and so it is no surprise that the Lloyd’s market is also taking a leadership role amongst regulators in thoughtfully measuring cyber exposure accumulation,” said Pascal Millaire (pictured), CEO of CyberCube. “We’re thrilled to be able to help Lloyd’s syndicates with this exercise using our platform.”
“The Lloyd’s market is a global leader in cyber insurance, so understanding and controlling exposure to this class of business is critical,” said Kirsten Mitchell-Wallace, Lloyd’s head of portfolio risk management. “Cyber is a rapidly evolving risk that demands scrutiny at both syndicate and market level; the use of scenarios helps Lloyd’s achieve this.”
“This is a very important piece of work for the broader RDS framework,” said Siobahn O’Brien, managing director and head of Guy Carpenter’s International Cyber Centre of Excellence. “The findings of the study will prove valuable not only for Lloyd’s syndicates, but also for the wider insurance industry in helping to address some of the most challenging aspects of cyber risk that impact multiple lines of insurance.”