Our risk and analytics specialists explore how you can apply cyber risk analytics to better inform risk management and insurance decisions for a stronger return on investment.
In this insight, we share our perspectives on strengthening both cyber risk management and cyber insurance strategy using analytics.
When it comes to cyber risk materializing in the form of an incident, it’s not a matter of if, but when. That’s why some of the largest claims we’ve worked through have come from Fortune 500 companies with impeccable cybersecurity controls. The inevitability of a cyber incident hitting your business is also why cyber insurance remains attractive to many organizations.
Strong cybersecurity controls, clear visibility into risk and a mature cybersecurity posture reduce your exposure. These factors also position your company to secure more favorable terms in the market, particularly when you’re able to demonstrate the financial impact of your controls and the likely impact of incidents.
Insurance is the ultimate financial backstop for cyber losses. If your business uses analytics to help better understand and manage cyber risks, including whether your current limits are truly adequate –you stand to be rewarded with better rates and broader coverage.
That’s the strategic advantage of pairing strong cyber risk hygiene with analytical cyber risk quantification.
Cyber risk quantification models can unlock opportunities to move beyond generic insurance solutions. With sharper cyber risk quantification comes more bespoke policy wording, targeted negotiation strategies with insurers and a more integrated approach to both traditional and alternative risk transfer.
When you have a targeted view of where your organization’s exposures truly lie, you can drive insurer negotiations with greater precision, focusing on specific limits and exclusions you may have otherwise overlooked if you relied on more ‘off-the-shelf’ cyber insurance solutions.
Analytical evidence can plot your path away from generic products to a cyber insurance program that’s both optimized for coverage and cost and better matched with how your business operates and drives revenue.
When you can refine your risk modeling using detailed inputs on the specifics of how your revenue streams function, for example, you get more precise calls on your business interruption valuations. Such evidence can lead to better cyber insurance outcomes by shifting underwriters’ perceptions.
Analytical insight also enables you to challenge internal assumptions on the appropriate level of cyber insurance coverage. You can be better equipped to overcome objections from your CISO or others on a leaner, more targeted cyber insurance approach.
We worked with an organization that used analytics to identify and quantify vulnerabilities in its help desk cybersecurity controls. The exposure it identified was significant enough to lead the business to review not only its cyber insurance program but also its crime coverage.
Analytical risk quantification led the organization to blend the two programs, which ensured alignment between the two previously disparate insurance areas. In designing a more integrated and efficient cyber insurance solution, the business closed critical gaps and bolstered its cyber resilience.
Your cyber insurance strategy should begin months in advance of renewal. We often suggest starting to plan well ahead of renewal, ideally at least 6 months in advance of renewal to accommodate board-level planning, executive budgeting cycles and internal decision-making timelines, depending on your business.
This extended timeframe gives business leaders the time to commission, carry out and scrutinize cyber risk analysis and, in doing so, avoid reactive decisions or those driven by assumptions or legacy thinking.
With analytical cyber risk quantification, risk managers have the vocabulary to shift cyber insurance conversations from being a transactional purchase to a strategic lever. It's analytics that can elevate cyber risk and insurance discussions to the boardroom, influencing not only more coverage decisions, but enriching broader enterprise risk posture and risk governance.
We’re seeing exactly this play out more frequently. Investors and stakeholders increasingly expect boards to demonstrate awareness of cyber threats together with a clear understanding of how those threats intersect with financial and operational resilience.
In these scenarios, analytics become indispensable. It enables your organization to both quantify cyber exposures in robust, auditable ways that stand up to investor scrutiny and translate technical cyber risk into business impact in ways that support board-level decision-making.
For specialist support on using analytics to optimize your cyber risk and insurance approach, get in touch.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
