Willis Re Launches Industry-First Cyber Risk Modeling Tool, PRISM-Re(TM)
February 03 2015 - 12:16PM
Willis Re, the reinsurance division of Willis Group Holdings plc
(NYSE:WSH), the global risk advisor, insurance and reinsurance
broker, today unveiled the insurance industry's first cyber risk
modeling tool that will enable insurers to quantify and manage
their portfolio exposure to data breaches, the leading cause of
cyber losses. In doing so, the new model - PRISM-Re™ - is a major
breakthrough in advancing the insurance industry's ability to
manage cyber risk and offer wider protection against the growing
tide of cyber-attacks.
Leveraging expertise from across the Willis Group, PRISM-Re™ was
developed in collaboration with Willis Retail's cyber team and
actuaries from Willis Risk & Analytics, whose Privacy Risk
Insurance Strategy Model (PRISM™) enables a single insured to
assess their exposure to data breach losses.
Similarly, PRISM-Re™ provides an objective analysis of the
susceptibility to data breach events across the insurer's
portfolio. Based upon the latest exposure data, the tool estimates
the frequency of data breaches and the potential severity of
insured losses arising from those events.
The model also employs a 'common shock' methodology to encompass
the possibility of contagion behavior, whereby numerous breaches
could take place systemically across a single industry sector or
related sectors. PRISM-Re™ therefore offers a way of
simulating the data breach impact of a so-called 'cyber hurricane'
or 'cyber tsunami'.
Commenting on the model's release, Mark Synnott,
Executive Vice President of Willis Re, said: "Cyber-crime
now costs the global economy around $450 billion annually and is
increasingly high on the agenda for national governments and
corporate boards. With recent high profile data breaches including
those of Sony, Target and Home Depot, it is an area that is seeing
a huge upsurge in demand. In a largely mature and static
insurance market, cyber represents one of the key avenues for
growth.
"Until PRISM-Re™ no model existed that could quantify the
exposure across an insurer's portfolio. A lack of this kind of
'holistic model', which are now so well-established for natural
catastrophes, has hindered the industry's ability to offer wider
protection – without clarity around the potential total exposure
faced, insurers have ultimately been constrained in underwriting
this risk class due to the uncertainty of the potential financial
impact.
"Our model helps provide greater objectivity and will allow
insurers to underwrite this risk with more confidence and to
therefore write more and/or higher limits. It may also give those
not currently providing coverage the confidence to enter into this
line. We at Willis Re can then assist our clients in evaluating and
then executing the most effective reinsurance strategy."
A recent speech on the state of the cyber market given by Mark
Synnott at the Association of Lloyd's Brokers annual meeting in
Chicago can be read here:
http://www.linktolloyds.com/blog/synnott
For further insight from Willis spokespeople on cyber risk,
visit WillisWire: http://blog.willis.com/category/cyber-risk/
About Willis Re
One of the world's leading reinsurance brokers, Willis Re is
known for its world-class Analytics capabilities, which it combines
with its Reinsurance expertise in a seamless, integrated offering
that can help clients increase the value of their businesses.
Willis Re serves the risk management and risk transfer needs of a
diverse, global client base that includes all of the world's top
insurance and reinsurance carriers as well as national catastrophe
schemes in many countries around the world. The broker's global
team of experts offers services and advice that can help clients
make better reinsurance decisions and negotiate optimum terms. For
more information, visit www.willisre.com.
About Willis
Willis Group Holdings plc is a leading global risk advisor,
insurance and reinsurance broker. With roots dating to 1828, Willis
operates today on every continent with more than 18,000 employees
in over 400 offices. Willis offers its clients superior expertise,
teamwork, innovation and market-leading products and professional
services in risk management and transfer. Our experts rank among
the world's leading authorities on analytics, modeling and
mitigation strategies at the intersection of global commerce and
extreme events. Find more information at our
website,www.willis.com, our leadership journal, Resilience, or our
up-to-the-minute blog on breaking news, WillisWire. Across
geographies, industries and specialisms, Willis provides its local
and multinational clients with resilience for a risky world.
CONTACT: Media:
Laura Molloy
+44 20 3124 8555
Email: Laura.Molloy@willis.com
Investors:
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+1 212 915 8084
Email: Peter.Poillon@willis.com