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Cyber Reinsurance

Cyber exposures impact almost every line of insurance, often making determining where “traditional” coverage ends, and the need for affirmative cyber protection begins, difficult. Willis Re helps clients manage both affirmative and harder-to-measure silent cyber exposures.

Cyber is a rapidly evolving line of coverage and source of exposure with few geographical or sector restraints. We have therefore integrated our approach so we can draw on expertise and market knowledge across all parts of Willis Re’s operating platform, enabling us to:

  • Access the broadest range of data and information to inform our modeling activities and risk management advice
  • Identify client needs and develop reinsurance solutions that have a universal application
  • Concentrate and inform our marketing activities so that we can maximize reinsurance capacity at the best terms for our clients

Silent cyber – today’s leading cyber issue

Managing affirmative cyber business is difficult enough for a fastgrowing product-line where data is scarce and soon out of date. It presents even more of a risk management challenge where potential cyber exposures in conventional lines of business are concerned.

There are hidden exposures, untested policy wordings and a range of downside events that must be evaluated with sums at risk that dwarf affirmative cyber policy limits. This is worrying stakeholders, from regulators to boards of directors, all of whom are looking for insurance company management to provide guidance.

In view of the sums at risk and the potential impact on our clients, we have made the study, evaluation and mitigation of silent cyber our number one priority. In this regard, we have:

  • Launched the industry’s first silent cyber survey in 2017.
  • Extended our PRISM-Re cyber model to cover silent cyber as well as affirmative cyber
  • Developed a stop loss reinsurance product, CAStL, that provides broad catastrophe coverage for cyber as a peril while avoiding the difficulties inherent in defining cyber cat events

Industry-leading analytical support

Cyber modeling is still in its early stages and presents a number of challenges, given the relative lack of data and evolving nature of exposure. Starting in 2015, we developed the industry’s first probabilistic portfolio model, PRISM-Re, to help insurance companies in quantifying their cyber accumulation risk potential and optimize their portfolio composition. This was originally developed for data breach but has since been extended to cover network outage and, more recently silent cyber, and our model includes both probabilistic and deterministic components to help evaluate exposure to more exteme downside scenarios. We have modeled over 30 cyber portfolios representing close to $1 billion of cyber premium with a range of individual and comparative portfolio outputs

We recommend that clients adopt a multi-model approach when conducting portfolio risk assessments in order to provide a range of modeling perspectives. We regularly assess third-party models to determine which ones will most benefit our clients and are consulted by outside modeling vendors for our views on the efficacy of their models.

We currently license three third-party models:

Output from these models as well as the output from PRISM Re enables our clients to develop more informed risk management strategies and guide reinsurance buying decisions.

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