How CyberCube helps assess cyber insurance risk

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Undoubtedly, cyber security – and managing risk – is top of mind for most business leaders today.

Consider that nearly 75% of organizations experience at least one cyber attack – and the average cost of a data breach is $4.35 million.

And, experts say, this makes cyber insurance all the more crucial.

“Cyber ​​risk is a business risk, so cyber insurance is a must for organizations,” write Forrester’s Heidi Shey and Alla Valente.

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Given all this, cyber risk management is one of the biggest growth opportunities for the insurance sector right now, said Pascal Millaire, CEO of cyber risk analytics platform CyberCube.

And, he said, “a key to unlocking this potential is the development of robust analytical tools to aid risk decision-making.”

To help further its capabilities in this area, CyberCube today announced $50 million in additional growth capital, bringing its total growth to more than $100 million.

Increased risk, opportunity in the cyber insurance market

The online insurance market size is estimated to grow from $12.8 billion in 2022 to $63.6 billion by 2029, registering a compound annual growth rate (CAGR) of 25.7%. According to Fortune Business Insights, the market showed more than 22% growth in 2020 compared to 2021.

Along with this growth, premiums are only getting higher, and it’s significant: the Association of Insurance Commissioners reports that cyber insurance premiums collected by the largest US insurers in 2021 increased 92% year over year.

“Cyber ​​risk presents the greatest opportunity property and casualty insurers have had in over a century,” said Millaire. “In a world of billions of Internet of Things (IoT) devices, the explosion of data and the automation of industries, cyber risk will reshape risk, the economy and society, and therefore the entire non-life insurance industry.”

At the same time, says CyberCube co-founder and chief product officer Ashwin Kashyap, “policyholders can improve their risk posture fairly quickly and respond to events that unfold 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 implementing multi-factor authentication (MFA) and disabling remote desktop services or controls that require multiple levels of approval.

Quantifying cyber risk

CyberCube competes in its market with, among others, AIR Worldwide, SecondSight, At-Bay, SecurityScorecard, BitSight and RedSeal.

The company’s cloud-based platform helps insurance organizations quantify cyber risk to facilitate insurance placement, evaluate individual commercial risks during the underwriting process and manage cyber risk aggregation, Millaire said.

“We quantify cyber risk to create actionable insights for insurers,” he said. “We turn cyber risk into dollars and cents, so organizations can make value-based decisions about how to manage, mitigate or transfer risk.”

The technology’s enterprise intelligence layer provides insights into millions of companies globally and includes modeling thousands of points of technology failure, he said. This allows insurers and brokers to understand portfolio exposure to cyber threats and enable their clients to better protect themselves.

The company’s SaaS products include:

  • Broker responsible, for brokers to better advise their clients on risk transfer.
  • Portfolio Manager, a scenario-based disaster model that provides portfolio-level insights for senior management decision-making.
  • Account manager, which gives insurance underwriters a unique view of each risk they assess with actionable insight.
  • CyberConnect, which integrates analytics through application programming interfaces (APIs), and integrates into existing workflows.

Holistic management of cyber insurance

Today’s funding round brings the company’s total raised to more than $100 million. It will support the development of CyberCube’s cyber risk quantification products, while accelerating expansion in the global insurance, reinsurance and brokerage business.

The 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 Verisk, also participated in the financing and will join the CyberCube board as a director.

Through 2022, CyberCube has also announced several strategic partnerships, including with Relm Insurance, Elpha Secure, Kapnick, Relay and EXL, Millaire said.

“The transfer of cyber risk to insurance markets is rapidly becoming ubiquitous and critical to holistic risk management across sectors,” said Don Dixon, co-founder and CEO of Forgepoint and Chairman of CyberCube.

Michael Millette, co-founder and managing partner of HSCM Bermuda and board member of CyberCube, agreed: “The quantification of cyber risk through robust modeling will allow industry participants to predict risk levels and provide useful pricing information.”

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