Actuaries beware: Pricing cyber insurance is a different ballgame

Though many companies have entered the cyber insurance space, very few are backed by comprehensive analytics. Insurers eager to grab market share are placing too much emphasis on the possibility of recent line profitability continuing into the future.

The problem here is obvious: cyber insurance needs to be priced at a low loss ratio due to catastrophic or aggregation risk, and once that wave of profitability ends, it could do so in dramatic fashion that proves devastating for many market participants.

This whitepaper focuses on the challenges faced by actuaries when pricing cyber risks and highlights why insurers need to start leveraging cyber security analytics to compensate for a lack of quality historical data.

Topics covered:
• Cyber insurance landscape.
• State of data.
• Actuarial challenges.