In this podcast appearance with AM Best, Erica Davis, Managing Director and Global Co-Head of Cyber, and Jess Fung, Managing Director and North American Cyber Analytics Lead, talk about Guy Carpenter’s report, Refocusing the Lens: An Updated Look at Cyber Model Divergence.
“Our reasons for the report are that the cyber market has continued to grow and mature. Guy Carpenter now calculates the global cyber market size to be about USD 15.5 billion in gross written premium,” Erica explained. “So, with that expansion, and as the nature of cyber risk continues to shift, there is an inherent need across the market to continuously refine the way we’re thinking about cyber risk quantification.”
Jess described how the basis of the study is a proxy portfolio of cyber. Guy Carpenter’s proprietary platform, GC CyberExplorerSM DataLake, provided 50,000 actual cyber policies to build that proxy portfolio, which she described as a very good representation of how the cyber industry looks today.
“This study is actually a revamp and refresh of a study we did a year ago,” she explained. “We expanded the scope to examine the model divergence, not just at the mean but also at the 1-in-100 and 1-in-200-year return periods to really home in on where insurance companies worry the most when it comes to exposure accumulation risk.”