Kathmandu. In addition to traditional underwriting factors (such as income, industry and location), digital footprint data can improve cyber claims estimation, a study has found.
This is according to research by Gallagher Re and cyber risk intelligence firm KYND. The study, titled ‘Digital Footprint Data and Cyber Claims Frequency: Predictive Value of Technographic Insights’, found out whether a better understanding of an organization’s external digital presence could help cyber insurers evaluate the likelihood of future claims. Using Gallagher RECO claims and pharmaographic data and external technographic observations of KYND for more than 63,000 insured entities, the study found that only digital footprint indicators were useful in predicting claims. However, combining technical and traditional underwriting data yielded excellent results.
The most predictive indicators included measures related to the scale and complexity of an organization’s internet-facing environment (e.g., the number of different ISPs, the variety of e-mail providers, the number of externally open services, and the IP footprint). The study also found that companies with a higher likelihood of cyber claims had a more complex and distributed external digital footprint as measured by indicators such as ISP diversity.
Rather than relying solely on lengthy questionnaires or traditional pharmaographic information, insurance companies can include visual indicators of Internet-facing complexity in underwriting and portfolio management decisions. “We’ve spent very little time asking how big a building is,” said Ed Pocock, global head of Gallagher Rica cybersecurity. They don’t fully capture the size and complexity of an organization’s Internet-facing footprint. ’
According to Pocock, research shows that understanding an organization’s digital footprint provides information about claim frequency in addition to established factors. “It provides an evidence-based starting point for understanding cyber risk,” he said. — Agency
