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Tuesday 12 December 2017

BREAKING NEWS

Allianz bolsters cyber risk modelling capability with Cyence JV

Written by staff reporter
2017-10-06

Allianz Global Corporate & Specialty has teamed up with Silicon Valley-based cyber risk analytics and modelling firm Cyence to boost its global cyber risk analysis capabilities.

Recent cyber attacks have illustrated how vulnerable even well-prepared businesses can be to such threats. Cyence estimates that May’s Wannacry ransomware caused economic losses reaching US$8bn, inclusive of extortion payments, business interruption lost profits, and extra expenses required to keep businesses moving and restore systems.

In parallel, cyber risk increasingly features on boardroom agendas, with some larger companies now looking to purchase cyber insurance coverage for up to €500 million in losses.

The global cyber insurance market is expanding quickly and is predicted to rise from US$ 2.5 billion in 2015 to US$ 7.5 billion by 2020, reaching US$ 20 billion in premiums by 2025, according to KPMG. This increasing demand creates challenges for insurers in assessing risk, both at individual company level and in the case of a widespread attack where claims may accumulate, producing industry-wide losses at potentially unprecedented levels. With limited historic claims information, plus a fast-changing cyber threat, traditional insurance underwriting approaches are struggling to fully assess these new risks.

In a second initiative, AGCS plans to integrate Cyence’s cyber risk analytics into new digital distribution platforms that enable low-touch, automated underwriting of cyber policies for medium-size companies. Both companies are also joining forces to develop a new predictive modelling tool for cyber-driven business interruption risks.

“We are moving our underwriting approach from hindsight to foresight,” explains AGCS board member Hartmut Mai as the rationale behind the cooperation with Cyence. “The future of underwriting and practical risk management will be based on the intelligent use of technology and data. AGCS has always been known for its industry-specific expertise, but going forward we must complement our technical know-how and experience with extensive data-driven insight and predictive modelling if we want to keep ahead of new risks such as cyber, supply chain, or emerging liability exposures. After an extensive evaluation of various partners, AGCS is excited to partner with Cyence for their market leading capabilities.”


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