The Casualty Actuarial Society (CAS) is forming the Task Force on Cyber Risk, a result of the growth of cyber risk and the need to find effective means of analyzing it. The task force will provide research and educational opportunities to analyze cyber risk, focusing on contingent events arising from cyber risk and any financial implications.
Every company is exposed to cyber risk. The analysis of cyber risk is essential in setting insurance premium levels, evaluating liabilities for insured cyber losses, and enterprise risk management of insurance companies underwriting cyber risk insurance. Recently reported data breaches at large corporations, educational institutions and government agencies are examples of cyber-related events that illustrate the rapid growth of cyber risk. Ways of managing cyber risk exposure range from employing more effective information security measures to wider use of cyber insurance.
Many aspects of cyber risk remain poorly understood. The expertise needed to analyze cyber-related events, the probabilities, and the ultimate financial impact is limited, both at the companies directly exposed to the risk and in the insurance industry. Task Force on Cyber Risk aims to use a multidisciplinary approach to gain a comprehensive view of cyber risk. This initiative has a strong potential to benefit enterprises and other entities exposed to cyber risk, policyholders purchasing cyber risk insurance, and insurance and reinsurance industries.
“In addressing the challenge of cyber risk analysis, it is essential to follow a multidisciplinary approach that brings together experts in actuarial science, cybersecurity and information technology, big data analytics, legal and other fields,” said Alex Krutov, chairperson of the Task Force on Cyber Risk.
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