Coalition launches model to understand aggregate cyber risks

US cyber insurtech Coalition has launched a risk model that helps to understand the aggregate impact of cyber attacks on organisations and the economy

Cyber insurtech Coalition has released what it calls the Active Cyber Risk Model, a practical framework for understanding cyber risk aggregation that provides an ongoing view into an organisation’s cyber risks and identifies preventive measures that will protect against new cyber threats.

The model, which is capable of simulating how a cyber event can trigger a series of actions that lead to substantial losses, offers a more accurate picture of cyber risk for businesses and for the economy as a whole.

It has already been used to illustrate that a once-in-250-year cyber event could cost more than $370mn in losses, or that a catastrophic cyber event could cost an estimated $29.8bn in total damage. It leverages Coalition’s technology platform, which actively monitors both the internet and the ever-changing landscape of vulnerabilities and attack vectors across hundreds of thousands of firms.

‘More data on cyber than any other risk’

Joshua Motta, Chief Executive Officer and Co-Founder at Coalition, says: “As the industry continues to dwell on catastrophic cyber events and how best to offer coverage, if at all, one thing remains abundantly clear: cyber risk is insurable. The insurance industry is uniquely positioned and capable of mitigating and protecting organisations from emerging cyber risks, and we are committed to protecting the hundreds of thousands of customers we serve.”

Shawn Ram, Coalition’s Head of Insurance, continues: “More data exists on cyber than any other risk. Using the right tools and systems to measure this risk can dramatically reduce potential impact. Unfortunately, we cannot prevent a catastrophic cyber event, but we can measure and contain catastrophic loss. For insurers, mapping cyber events to policyholders and the technologies they use are key to modelling aggregate risk. For businesses, the key to preparing for a catastrophic event is adopting proactive measures, like Coalition’s Active Insurance, and building a thoughtful response plan.”

‘Cyber risk is insurable,’ Coalition says

Despite the sustained insurability of cyber attacks, it is feared that the current cost-of-living pressures facing businesses could tempt some firms into de-prioritising cyber cover. Budgetary pressures have already prompted some consumers to scale back on insurance, while insurance fraud has skyrocketed to record levels. Fraudsters and cyber criminals are not immune to the same economic challenges that we all face, so the threat landscape to businesses and public sector services continues to be high.

However, Coalition will hope that its latest risk modelling capabilities will prove its claim that cyber risk is inherently insurable and reaffirm its position as one of the leading emerging cyber insurtechs. The company has raised over US$600mn since the beginning of 2021 and announced big-name partnerships with the likes of Allianz, Bluevine and Armorblox.


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