Historical Cyber Industry Loss Estimates and Risk-Transfer Index for Events Worldwide
JERSEY CITY, N.J., Sep 11, 2018 - (ACN Newswire) - Property Claim Services(R) (PCS(R)), a Verisk (Nasdaq:VRSK) business, is excited to announce the enhancement of PCS Global Cyber(TM) with coverage for cyber catastrophe events. The inclusion of events with multiple insureds spanning both affirmative and silent cyber addresses industrywide insured losses of at least $250 million and is now available for existing PCS Global Cyber users.
From the inception of PCS Global Cyber in September 2017, the plan was always to add a cyber catastrophe component that addresses both affirmative and silent cyber. The service goes live with an industry loss for the 2017 Petya/NotPetya event and will add future events as they arise. This addition to PCS Global Cyber enables insurers, reinsurers, and other stakeholders in the global risk and capital supply chain to gain access to an unbiased view of broad cyber catastrophe events around the world. Additionally, they can use the index to facilitate reinsurance and alternative risk-transfer transactions, an area where the need for a loss aggregation service has been palpable.
According to Tom Johansmeyer, cohead of PCS, "There's no one correct approach to managing risk and capital in the face of a growing cyber threat. The latest iteration of PCS Global Cyber helps risk bearers address any silent exposure they may have lurking in their portfolios while also taking an active approach to the cyber business they purposely write. We believe that the prevalence of affirmative or silent cyber risk will fluctuate in the years to come as the market evolves and losses occur. So, rather than take a view that one approach will emerge, the PCS team has worked closely with the market to develop a loss index suite that will serve the market as cyber continues to evolve."
Johansmeyer continued, "The launch of cyber catastrophe loss estimates provides another mechanism for fueling industry growth through ILW [industry loss warranty] trading, especially when it comes to accessing capital markets capacity."
Aritra Chatterjee, chief underwriting officer for Envelop Risk, said, "The industry has so far struggled with converging to a standard cyber event definition, which is often difficult to achieve without an independent third party opining on what constitutes an event and the quantum of it. With PCS filling the gap, several possible structures can be offered in the reinsurance market. We're excited about this opportunity."
Rob Ashton, CEO of Radius Specialty Limited, noted, "Few, if any, other perils are being approached in the same way as nonaffirmative cyber-affording coverage for a known multidisciplinary peril that's growing in potential severity almost daily, yet with limited information available to underwriters that would allow them to price the risk, manage accumulations, and hedge their downside. As such, it's one of the most salient emerging threats to the global insurance market. As a capacity seller, we see buyers express interest in potential risk transfer solutions, but deal completion is slow and sporadic. However, as management, regulators, and rating agencies start to scrutinise these risks more closely and have a better understanding and more granular view of projected ultimate loss, including the nonaffirmative side from PCS, we expect this will change quite dramatically over the next 18 months."
David Flandro, global head of analytics, JLT Re, stated, "PCS have taken a pioneering step forward in their construction of a cyber catastrophe loss index. JLT Re are very excited to align with PCS in its journey to bring greater clarity regarding both affirmative and silent cyber claims. We are confident that this will represent an important milestone for the industry."
Expanding the specialty lines approach developed initially for PCS Global Marine and Energy(TM), PCS will be able to drive more specialty lines risk loss aggregation solutions to market faster, providing insurers and reinsurers with greater flexibility, a deeper understanding of loss events, and improved response when an incident occurs.
The global insurance and reinsurance industry's response to the launch of PCS Global Cyber has been quite strong. Developed with ongoing support from a wide range of sector stakeholders, the solution has already received considerable support.
PCS Global Cyber has estimates for 13 affirmative events, with 7 coming since the launch of the service a year ago. Additionally, it now includes an industry cyber catastrophe loss for Petya/NotPetya. The full historical database is complete and ready for use, as is the process for developing future estimates.
Beginning in 2017, PCS entered the global specialty lines space, launching PCS Global Marine and Energy, PCS Global Cyber, and PCS Global Terror(TM) (in the first quarter of 2018).
Verisk (Nasdaq:VRSK) is a leading data analytics provider serving customers in insurance, energy and specialized markets, and financial services. Using advanced technologies to collect and analyze billions of records, Verisk draws on unique data assets and deep domain expertise to provide first-to-market innovations that are integrated into customer workflows. Verisk offers predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe and weather risk, global risk analytics, natural resources intelligence, economic forecasting, and many other fields. Around the world, Verisk helps customers protect people, property, and financial assets.
Headquartered in Jersey City, N.J., Verisk operates in 30 countries and is a member of Standard & Poor's S&P 500(R) Index. In 2017, Forbes magazine named Verisk to its America's Best Mid-Size Employers list and to its World's Most Innovative Companies list. Verisk is one of only seven companies to appear on both lists. For more information, please visit www.verisk.com.
MWWPR (for Verisk)
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Source: Verisk Analytics Inc. via Globenewswire
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