QBE to licence RMS cyber model
Written by staff reporter
QBE has agreed a multi-year deal to license the RMS Cyber Accumulation Management System, supporting the insurers growing cyber business. The limited historical precedent for this peril makes it particularly challenging for insurers to set their capacity levels. Without the valuable insights into the extreme, but plausible, cyber events, many insurers have to assume a conservative view of risk as they are unable to set the Probable Maximum Loss for cyber catastrophes. This can limit growth of this potentially profitable line of business, as well as the efficient management of a firm’s capital.
Christer Pehrson, managing director of client development at RMS, said: "Accumulations of cyber risk are hugely complex and not geographically limited, unlike perils such as hurricanes or earthquakes. The web of potential impacts and losses is enormous and insurers are increasingly concerned about the growing accumulation of risks within their cyber insurance business. The RMS Cyber Accumulation Management System will enable QBE to understand and control this accumulation to maximize the opportunity provided by cyber as a new line of business."
Eric Letourneau, senior vice-president and group head of catastrophe modelling at QBE, said: “Cyber has the potential to trigger a correlated loss across many accounts. Therefore, a deep understanding of its systemic risk and the consequent impact on our interconnected world is critical to managing the risk. QBE’s objective is to manage cyber exposures within a well-defined risk appetite, similar to established practices for property accumulations. The RMS Cyber Accumulation Management System helps us address the significant challenge of aggregate cyber risk and we are excited about its future roadmap.”
The RMS Cyber Accumulation Management System incorporates its open source data schema which provides a common approach for capturing exposure. This data schema is increasingly being adopted as the market standard for cyber exposure with more than 20 cyber insurers now using it. The RMS Cyber Accumulation Management System also streamlines regulatory reporting, reducing insurers’ overheads.