Mark Synnott, Executive Vice President of Willis Re:
"Cyber-crime now costs the global economy around $450 billion annually and is increasingly high on the agenda for national governments and corporate boards. With recent high profile data breaches including those of Sony, Target and Home Depot, it is an area that is seeing a huge upsurge in demand. In a largely mature and static insurance market, cyber represents one of the key avenues for growth.
(Source Communication corporate) NEW YORK, Feb. 3, 2015
Willis Re, the reinsurance division of Willis Group Holdings plc (NYSE:WSH), the global risk advisor, insurance and reinsurance broker, today unveiled the insurance industry's first cyber risk modeling tool that will enable insurers to quantify and manage their portfolio exposure to data breaches, the leading cause of cyber losses. In doing so, the new model - PRISM-Re™ - is a major breakthrough in advancing the insurance industry's ability to manage cyber risk and offer wider protection against the growing tide of cyber-attacks.
Leveraging expertise from across the Willis Group, PRISM-Re™ was developed in collaboration with Willis Retail's cyber team and actuaries from Willis Risk & Analytics, whose Privacy Risk Insurance Strategy Model (PRISM™) enables a single insured to assess their exposure to data breach losses.
Similarly, PRISM-Re™ provides an objective analysis of the susceptibility to data breach events across the insurer's portfolio. Based upon the latest exposure data, the tool estimates the frequency of data breaches and the potential severity of insured losses arising from those events.
The model also employs a 'common shock' methodology to encompass the possibility of contagion behavior, whereby numerous breaches could take place systemically across a single industry sector or related sectors. PRISM-Re™ therefore offers a way of simulating the data breach impact of a so-called 'cyber hurricane' or 'cyber tsunami'.
Commenting on the model's release, Mark Synnott, Executive Vice President of Willis Re, said: "Cyber-crime now costs the global economy around $450 billion annually and is increasingly high on the agenda for national governments and corporate boards. With recent high profile data breaches including those of Sony, Target and Home Depot, it is an area that is seeing a huge upsurge in demand. In a largely mature and static insurance market, cyber represents one of the key avenues for growth.
"Until PRISM-Re™ no model existed that could quantify the exposure across an insurer's portfolio. A lack of this kind of 'holistic model', which are now so well-established for natural catastrophes, has hindered the industry's ability to offer wider protection – without clarity around the potential total exposure faced, insurers have ultimately been constrained in underwriting this risk class due to the uncertainty of the potential financial impact.
"Our model helps provide greater objectivity and will allow insurers to underwrite this risk with more confidence and to therefore write more and/or higher limits. It may also give those not currently providing coverage the confidence to enter into this line. We at Willis Re can then assist our clients in evaluating and then executing the most effective reinsurance strategy."
A recent speech on the state of the cyber market given by Mark Synnott at the Association of Lloyd's Brokers annual meeting in Chicago can be read here: http://www.linktolloyds.com/blog/synnott
For further insight from Willis spokespeople on cyber risk, visit WillisWire: http://blog.willis.com/category/cyber-risk/
About Willis Re
One of the world's leading reinsurance brokers, Willis Re is known for its world-class Analytics capabilities, which it combines with its Reinsurance expertise in a seamless, integrated offering that can help clients increase the value of their businesses. Willis Re serves the risk management and risk transfer needs of a diverse, global client base that includes all of the world's top insurance and reinsurance carriers as well as national catastrophe schemes in many countries around the world. The broker's global team of experts offers services and advice that can help clients make better reinsurance decisions and negotiate optimum terms. For more information, visit www.willisre.com.
Willis Group Holdings plc is a leading global risk advisor, insurance and reinsurance broker. With roots dating to 1828, Willis operates today on every continent with more than 18,000 employees in over 400 offices. Willis offers its clients superior expertise, teamwork, innovation and market-leading products and professional services in risk management and transfer. Our experts rank among the world's leading authorities on analytics, modeling and mitigation strategies at the intersection of global commerce and extreme events. Find more information at our website,www.willis.com, our leadership journal, Resilience, or our up-to-the-minute blog on breaking news, WillisWire. Across geographies, industries and specialisms, Willis provides its local and multinational clients with resilience for a risky world.