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Undoubtedly, cybersecurity – and managing risk – is a top priority for most business leaders today.
Think about that almost 75% of organizations have experienced at least one cyber-attack — and so is the average cost of a data breach $4.35 million.
And, experts say, this makes cyber insurance all the more important.
“Cyber risk is a business risk, so cyber insurance is a must-have for organizations,” write Forresters Heidi Shey and Alla Valente.
Given all this, cyber risk management is one of the biggest growth opportunities for the insurance industry right now, says Pascal Millaire, CEO of cyber risk analytics platform CyberCube.
And, he said, “a key to unlocking this potential is developing robust analytics tools to support risk decisions.”
To further advance its capabilities in this area, CyberCube today announced $50 million in additional growth capital, bringing the total amount raised to more than $100 million.
Increased risk, opportunities in the cyber insurance market
The cyber insurance market size is expected to grow from $12.8 billion in 2022 to $63.6 billion in 2029, with a compound annual growth rate (CAGR) of 25.7%. According to Fortune Business Insights, the market in 2020 showed growth of more than 22% compared to 2021.
Along with this growth, premiums are only going to get higher, and significantly: The Association of Insurance Commissioners reports that cyber insurance premiums collected by the largest U.S. insurance companies will increase by 2021 92% year after year.
“Cyber risk presents the greatest opportunity property and casualty insurers (P&C) have had in more than a century,” said Millaire. “In a world with billions of Internet of Things (IoT) devices, the explosion of data and automation of industries, cyber risk will reshape risk, the economy and society, and with it the entire property and casualty insurance industry.”
At the same time, says Ashwin Kashyap, co-founder and chief product officer of CyberCube, “policyholders can improve their risk exposure fairly quickly and respond to unfolding events by taking actions that can dramatically reduce the overall risk they pose to an insurer.”
Cyber hygiene practices that insurers are likely to require, Kashyap said, include enterprise-wide implementation of multi-factor authentication (MFA) and disabling remote desktop services or having checks that require multiple levels of approval.
Quantify cyber risk
CyberCube competes in its market with AIR Worldwide, SecondSight, At-Bay, SecurityScorecard, BitSight and RedSeal, among others.
The company’s cloud-based platform helps insurance organizations quantify cyber risk to facilitate underwriting, evaluate individual commercial risks during the underwriting process and manage cyber risk aggregation, Millaire said.
“We quantify cyber risk to create actionable insights for insurance companies,” he said. “We convert cyber risk into dollars and cents so organizations can make value-based decisions about how to manage, mitigate or transfer risk.”
The enterprise intelligence layer of the technology provides insight into millions of companies worldwide and includes modeling of thousands of points of technology failure, he said. This gives insurers and brokers insight into their portfolio’s exposure to cyberthreats and allows their customers to better protect themselves.
The company’s SaaS products include:
- Broker manager, for brokers to better advise their clients on risk transfer.
- Portfolio Manager, a scenario-based catastrophe model that enables portfolio-level insights for senior executive decision-making.
- Account manager, who gives insurers a unique view of each risk they assess with actionable insights.
- CyberConnect, which integrates analytics through Application Programming Interfaces (APIs) and integrates into existing workflows.
Holistic cyber insurance management
Today’s funding round brings the company’s total proceeds to more than $100 million. It supports the development of the CyberCube products for quantifying cyber risk and accelerates go-to-market expansion in the global insurance, reinsurance and brokerage industries.
Funding came from investment funds managed by Morgan Stanley tactical value (Morgan Stanley), with continued participation from existing investors Forgepoint Capital, Hudson Structured Capital Management (Bermuda) Ltd., MTech Capital and key investors from Stone Point Capital. Scott G. Stephenson, former chairman, president and CEO of insuredalso participated in the funding and will join the CyberCube board as a director.
In 2022, CyberCube also announced several strategic partnerships, including with Relm Insurance, Elpha Secure, Kapnick, Relay and EXL, Millaire said.
“The transfer of cyber risk to the insurance markets is rapidly becoming ubiquitous and vital for holistic risk management across all industries,” said Don Dixon, co-founder and general manager of Forge Point and Chairman of the CyberCube Board.
Michael Miletteco-founder and managing partner at HSCM Bermuda and board member of CyberCube, agreed: “The quantification of cyber risk through robust modeling enables industry participants to predict risk levels and provide useful pricing information.”
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