Skip to main content

Counting the cost

Cyber exposure decoded. Introducing two scenarios to help insurers quantify cyber-risk aggregation

Mon 10 Jul 2017

While digitisation is revolutionising business and daily life, it is also making the global economy more vulnerable to cyber-attacks. As the cyber threat grows so the demand for cyber insurance increases.

Today, Lloyd’s Class of Business team estimates that the global cyber market is worth between $3 billion and $3.5 billion. Despite this growth, insurers’ understanding of cyber liability and risk aggregation is an evolving process as experience and knowledge of cyber-attacks grows.

The aim of this report is to provide insurers who write cyber coverage with realistic and plausible scenarios to help quantify cyber-risk aggregation.

By understanding cyber-risk exposure, insurers can improve their portfolio exposure management, set appropriate limits and gain the confidence to expand into this fast-growing insurance class.

The report is designed for risk managers whose businesses are exposed to the types of cyber-attacks described in the report’s two scenarios: a hack that takes down their cloud-service provider or an attack that causes the failure of a particular operating system across their own company, customers, suppliers and/or business partners.

We have also produced a technical guide for underwriters, exposure managers and managing agents in the Lloyd’s market which details how to apply the methodology to risk portfolios.

Cyber experts on the report's key findings for businesses and insurers