Combat the challenge and complexity of cyber with continuous underwriting

The cyber insurance sector is going to have to fundamentally change the way it operates. The ever-changing nature of cyber threats means insurers and their clients have to be vigilant, always aware of new risks emerging through the life of a policy.

This can seem anathema to companies used to two or maybe three client interactions in any given year: quote, claim and renewal. The nature of cyber threats means constant monitoring, assessing and communication between all parties. And it’s no exaggeration to say that the majority of companies in the insurance sector were not set up for such a dynamic experience.

Join us at Underwriting Innovation USA on November 12 when keynote speaker Trent Cooksley, chief operations officer and co-founder of Cowbell Cyber, will be discussing what the cyber landscape looks like and some of the different approaches required, as well as outlining the challenges and opportunities this relatively new risk presents.

Cooksley spoke to Intelligent Insurer ahead of the event.

Why is cyber risk unique?

The biggest thing is that cyber exposure changes on a daily basis. There’s not a lot of consistency in the exposure or some of the loss development that occurs. In addition, new technology is invented on a daily basis and with companies moving from old systems, and adding new devices, this creates exposures that are different from the ones they’re used to.

It creates volatility in the portfolio and underwriters cannot rely on historical data as they do in more traditional lines.

How do insurers cope with a constantly shifting landscape?

It’s important to think about cyber on a continuous basis. You’re assessing, managing and reviewing the risk in real time, all the time. You can’t just set it and forget it. A lot of companies who have mature books of business might not have caught up with the change happening within those risks.

Just asking questions on the renewal application isn’t enough to get the right information on where the risk stands at that given point in time. New and remote employees joining the business, an evolving technology stack, digitisation initiatives and moving from on-premises to the cloud means you have to follow those changes to have a continuous understanding of where the risk is today.

What are the benefits of continuous risk assessment?

As an insurer, if you’re starting from a legacy standpoint, the first thing you want to do is leverage all the data you have. It needs to be normalised and standardised and a lot of organisations haven’t got around to this yet or they’re still in the process of doing it. It’s not easy, but it is a very good first step.

Building the capabilities for this sort of process from the ground up is difficult and a lot of insurers will have to find partners. We’re seeing many more people saying that this could be too much of a stretch for them and they can’t bridge that chasm. But the simple fact is that they have to, if they are to understand the new signals and risk landscape. Having the right talent on staff and the right tools to facilitate engagement with policyholders is vital.

Why will aggregated risks lead to better regulation and pricing?

One of the exciting aspects of development, particularly within cyber, is the changing focus from “rear view” to “headlight”. Unlike other lines of business we don’t have 100-year-old models, that are stable and reliable and help you predict risk. But we do have a lot of new data on which you can perform plenty of aggregation modelling.

The technology stacks, how people are engaging with supply chains on software, logistical challenges and how people are reacting to those challenges are still on the nascent side. The first step is getting the data and aggregating the risks that are driving the marketplace.

Who should attend this session and what do you hope they’ll take away from it?

Underwriters, reinsurers, claims professionals, brokers, insurers—everyone. The cyber market is in transition so everyone should be on board. We need to do things differently to build an economically viable insurance model. There’s a lot of focus at Cowbell on a technology and data-driven approach that can help insurers to adapt rapidly to new circumstances.

I’m hoping attendees will go back to their organisations with a more holistic view of what’s happening in the marketplace, and move away from some of the anchoring that has happened. Over the last few years, the sector has been moving into problem-solving mode and that will drive everyone towards this approach. There are still a lot of people taking a defensive rather than an offensive stance here.

Cyber grew about 27 percent last year, while commercial grew by only 4 percent, but three or four out of five companies are still underinsured or not insured at all. It’s a fascinating market and one of the fastest-growing out there.

Join keynote speaker Trent Cooksley, chief operations officer and co-founder of Cowbell Cyber, at Underwriting Innovation USA on November 12 at 10:20am EST when he’ll be demonstrating why continuous underwriting could be the answer to the “always-on” cyber challenge facing insurers today.

This is the biggest online event tailored specifically to underwriting—don’t miss out. Register now!