New report demonstrates a multi-billion dollar danger to insurers and the wider UK economy due to a cyber attack.
Analysis shows insured business interruption losses from a cyber catastrophe could reach an estimated $3.25 billion.
Kovrr, a predictive cyber risk modeling company, today released a new report that predicts the potential financial damage that could hit insurers in the event of a major email service provider in the UK suffering an outage caused by a cyber attack.
“The constantly growing and evolving nature of cyber risk now affects all lines of insurance. This report illustrates how a cyber catastrophe could cause similarly sized losses to the 2007 UK property flood losses, which cost $4.8 billion. Insurance and reinsurance companies ought to act now to make sure they are properly managing their cyber exposures before a cyber catastrophe happens.”
Kovrr CEO, Yakir Golan
Every day much of the world’s commerce is facilitated by the 290 billion email messages that are sent worldwide by over 3.9 billion users. A cyber-attack on an email service provider lasting hours, days or weeks would result in an outage could lead to a large number of business interruption claims and substantial losses for (re)insurance carriers.
The key characteristics of this type of cyber catastrophe are high severity and low frequency, meaning, an event that does not occur regularly but entails great damage potential, affecting numerous businesses and leading to multiple claims on a (re) insurance carrier at a single point in time.
The report, authored by Marco Lo Giudice and Shalom Bublil explains how even though overall cyber premiums are significantly lower than property premiums in the UK, the potential exists for a multi-billion dollar insured loss similar to the risk of a flood catastrophe covered by property insurance.
To learn more about Kovrr’s novel approach to modeling cyber catastrophes please register for the Kovrr Webinar on July 10th at 11a EST / 4pm BST. Register for Kovrr’s Cyber Catastrophe Webinar
Kovrr is a predictive cyber risk modeling platform.
Kovrr delivers global (re)Insurers transparent, real-time data-driven insights into their affirmative and non-affirmative single, accumulated and catastrophic cyber risk exposures.
The Kovrr platform is designed to help underwriters, exposure managers and catastrophe modelers quantify and manage cyber risk at scale by utilizing AI-powered predictive risk models that evolve in real-time to continuously reflect new cyber threats.
About The Authors:
Marco Lo Giudice is SVP, Pricing at Renaissance Re and a member of Kovrr’s Advisory board.
Shalom Bublil is one of Kovrr’s Co-founders and it’s Chief Risk Officer.
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More information is available at: www.kovrr.com