While Australia's cyber insurance market is still quite immature, the government needs to set the agenda and determine the priority areas for attention, according to Pip Wyrdeman, Senior Adviser Cyber Policy for the Office of the Cyber Security Special Adviser at the Department of the Prime Minister and Cabinet (PM&C). Speaking at the InnovationAus Cyber Insurance 2017 conference in Sydney on Thursday, Wyrdeman said government cannot do it alone, and in addition to partnering, it will require individuals and businesses to understand what is at the heart of their business -- in particular where data lives and who has access to it, and how the business would survive should a cyber-related incident occur. Wyrdeman said her department has had many discussions with those providing and seeking cyber insurance and the fundamental that always comes up is what can actually be insured in the cybersecurity space. "There are many impacts from a cyber incident; some can be insured against and some can't," she explained. She said it's easy to see how the loss of one's computer systems due to malware destruction could be insured against, as could loss of income; however she said it starts to get "murky" when it comes to customer data.
Kovrr has launched a predictive cyber risk modeling platform to empower P&C insurers to manage the dynamic nature of cyber risk and to underwrite it efficiently. On a daily basis, Kovrr analyzes millions of emerging cyber threat signals, collected from a wide range of proprietary intelligence sources. Kovrr's AI engine fuses structured and unstructured data sources into actionable risk insights in real-time. The platform allows Kovrr's customers to confidently assess, quantify and manage their cyber risk exposures in cyber insurance, while providing their clients preventative risk advices. Cyber risk poses unique opportunities and challenges to insurers.
Dramatic advances in artificial intelligence and machine-learning technologies have accelerated the ability of insurers to predict risk. Algorithms can find trends and patterns that help forecast the probability of a risk situation occurring again. By utilising internal and external data sources, algorithms are selected according to how a specific model fits with the insurer's data. This model is applied to predict or detect the likelihood of an event happening, such as a person needing medical attention abroad for travel insurance or a house flooding for home insurance. Insurance and assistance provider The Collinson Group uses a variety of predictive analytical tools to flash through terabytes of data to find variables, some of which it hadn't considered, to help predict customer risk and purchasing behaviour.
Cyber analytics company CyberCube is calling for the international insurance industry to take a greater role in shaping the cybersecurity landscape. The company recently published a report, entitled "Scoping a Cyber Catastrophe: Understanding the Societal Impact of the Fourth Industrial Revolution and The Role of Insurance," exploring society's increasing exposure to digital risks, and what measures the insurance industry can take in order to address the issue. According to the report, $1.25 trillion was spent on digital transformation by organisations around the world in 2019. That figure is projected to rise to $1.97 trillion by 2022. CyberCube warned in its report that the introduction of 5G networks across the globe will offer cybercriminals faster and wider access to critical infrastructure and associated online services.