AIR's new probabilistic cyber model to aid cyber ILW & ILS development Artemis.bm

Global catastrophe risk modeller, AIR Worldwide, has announced the development of a new probabilistic cyber model that market participants state will reinforce their ability to develop and deliver innovative solutions such as cyber ILWs and insurance-linked securities (ILS) for cyber risk. The new cyber risk model is to be included in the latest version of the firm's cyber risk modelling and analytics platform, ARC (Analytics of Risk from Cyber), which is due for general release on October 31st, 2018. According to AIR, the new probabilistic cyber model estimates the likelihood, severity, and economic and insurance impact of security breaches and cloud service provider downtime, which are one of the most likely forms of aggregation risk for cyber. It will help traditional underwriters of cyber insurance and reinsurance risk, providing them an enhanced view of threats and ability to analyse portfolio and risk metrics data. At the same time, Ian Newman, partner and global head of cyber at reinsurance broker Capsicum Re, one of the first users of AIR's new model and part of the model's development, said that the model reinforces the company's ability to develop innovative insurance solutions, "such as cyber industry loss warranties (ILWs), and work with insurance-linked securities (ILS)."