In today’s digital age, data breaches have become a common occurrence. As a result, the demand for cyber insurance has skyrocketed, with businesses seeking protection against financial losses and reputational damage. However, for cyber insurance underwriters, accurately assessing an organization’s cyber risk is incredibly challenging. In this blog post, we explore seven key steps to get the right data for cyber insurance underwriters.
The importance of cyber insurance underwriting
Cyber insurance underwriting plays a crucial role in safeguarding businesses against the devastating financial impact of cyber-attacks. By assessing an organization’s cyber risk, underwriters determine the terms, conditions, and premiums of cyber insurance policies. Most underwriters use industry data and average data breach information. This is not adequate. This data does not provide any information about the financial exposure and the effectiveness of cyber tools. This is where InsurQ is of immense value.
Step 1: Scanning the Infrastructure
InsurQ provides an automated scan that identifies all the devices, hardware, and software the insured is running. This complete IT asset inventory is essential to know what the insurance company is insuring.
Step 2: Automating the Cyber Insurance Application
In turn, this eliminates the need for the insured to fill out the security overview section of the questionnaire. Automated data to the insurance company provides a true understanding of the cyber tools in place, their effectiveness and what assets are being protected.
Step 3: Determining Probable Maximum Loss (PML)
Data from the scan is used to determine probable maximum loss. Understanding the maximum loss is used in underwriting P&C policies. In cyber, the amount that can be spent on data breaches, regulatory fines, ransomware, and DDoS events is critical to see where the insured has risk. These financial exposures provide a comprehensive and objective assessment of an organization’s possible financial impact. Financial exposures provide underwriters with a standardized and objective measure of an organization’s cybersecurity risk. By leveraging this data, underwriters can gain a deeper understanding of an organization’s risk profile, enabling them to make more informed decisions in underwriting cyber insurance policies. This ultimately leads to a fair and accurate assessment of impacts and ensures that businesses are adequately protected.
Step 4: Using Cyber Tool Information to Determine Likelihood
The scan provides data about cyber tool effectiveness and how it is related to how likely a cybercriminal will cause damage. These include various factors such as antivirus coverage, MFA, and patch information to see the effectiveness of security tools and controls in place.
Traditionally, underwriters have had to rely on manual questionnaires when evaluating an organization’s cybersecurity posture. This not only requires significant time and resources, but it also introduces the risk of human error. However, we automate the assessment process and save valuable time. This data shows the likelihood an attack may have and provides a standardized measure of an organization’s security coverage, eliminating the need for manual assessments.
Step 5: Enhanced underwriting capabilities
With this comprehensive overview, underwriters can make more informed decisions about coverage and premiums, ensuring that businesses are adequately protected. With the ability to easily access and analyze this objective data, underwriters can make quicker and more accurate decisions about coverage and premiums. This streamlined underwriting process not only improves efficiency but also enhances the overall customer experience, making it a must-have for cyber insurance underwriters.
Step 6: Risk Accumulation Metrics
Using this data can demonstrate where risk is accumulating across the technology stack. As an example, if a portfolio has 100 clients and 70% of them use AWS, the insurance company can adjust their ongoing acquisition of policies to include more Azure or Google Cloud. When AWS has leaky S3 buckets all 70% of insureds will file a claim.
Step 7: Continuous Monitoring
Using this technology allows for scans of the insured to be done as required. Did they add the MFA? Did they put Antivirus on all their computers? Contingencies are a part of insurance and providing a strong understanding if they were put in place will help to demonstrate the insureds commitment to their cyber program.
The importance of investing in the right technology will make your cyber insurance company profitable.
In conclusion, using the right data and technology is crucial for underwriters to become profitable. If you are interested in learning more, contact us today.