NEW YORK — The time to manage cyber risk aggregation is now and it may be an uphill battle against lack of historical data and certainty of the risk, but the industry appears to be on the right track, according to a panel of experts speaking during Advisen’s Cyber Risk Insights Conference here on Oct. 26.
Currently, determining whether insurers are well capitalized to handle the cyber risk aggregation is “basically impossible” due to lack of data, according to Fred Eslami, senior financial analyst and cybersecurity leader for A.M. Best. Traditionally, the roads to impairment for insurers have been underreserving, expanding too quickly, and natural catastrophe losses. Ratings firms have metrics to input into their capital models for those risks – not for cyber, but Eslami added that they are making strides.
“We don’t believe that it’s getting to a point where the so-called cyber PML would exceed earthquake or hurricane levels,” he said.
Read more at https://www.advisenltd.com/2017/11/09/insurers-right-path-managing-cyber-risk-aggregation/
Erin Ayers, Insurers ‘on the right path’ to managing cyber risk aggregation (November 2, 2017), available with subscription at Advisen Cyber Front Page News.
Advisen Ltd. 