Cyber Risk Toolkit
The American Academy of Actuaries’ Cyber Risk Toolkit, developed by the Academy’s Committee on Cyber Risk, is a series of papers addressing issues pertinent to cyber risk insurance and cyber exposure. This toolkit is intended to be a resource for interested readers of the general public, public policymakers, the actuarial profession, the insurance sector, and other stakeholders.
While the papers that follow stand alone, the complete toolkit offers a cohesive overview of the challenges posed in the cyber insurance market. The toolkit will be updated periodically to reflect new and emerging work from the committee.
Learn more about the Academy’s Committee on Cyber Risk.
Cyber Risk Toolkit
This introductory paper addresses some of the key aspects of cyber risk and insurance, such as general product market, and insurance coverages and features. It also discusses some of the more well-known cyber-attacks.
The cyber threat landscape is continually changing and evolving as attackers develop new tools and discover new attack vectors and defenders find new techniques to counter these attacks.
Insurers face mounting losses from unintended coverages, despite clear cyber coverage. Emerging threats like data breaches and malware worsen this “silent cyber” risk, posing significant challenges to insurers.
Cyber insurers lack the years of historical data typically used in other property/casualty lines to build reliable pricing models. As data grows, cyber risk remains difficult to evaluate due to limited experience or the evolving nature of exposure, which also complicates reserving.
Accumulation risk, or aggregation risk, refers to the possibility of higher-than-expected claims from multiple exposures linked to the same event. With increasing digital connectivity, a single cyber event could impact many businesses globally.
Reinsurers, like primary insurers, are cautious with cyber insurance and are building cyber underwriting capabilities. As risk understanding improves, reinsurance capacity has expanded, reflecting a growing demand in the market.
Cybercrime is set to grow as remote work and IoT adoption increase. Ransomware is one of the fastest-growing threats, often resulting in temporary or permanent loss of data and complete shutdown of operations, to rendering hardware inoperable.
As cyber insurance expands, policyholders worry about coverage for incidents tied to cyberattacks involving nation-state support. These actors often have political or ideological affiliations and may be linked to state-backed military units.
The rise of autonomous vehicles is blurring the line between cyber and auto insurance. This section covers AV growth, their cyber risks, and the laws overseeing cyber insurance.
Within Cybercrime
This paper seeks to provide a baseline understanding of digital assets for insurance industry practitioners whose lines of business may interact with digital assets and highlight recent trends surrounding their use within cybercrime.
Developed to offer actuarial insights, this guide highlights resources that help users better understand cyber risks. It streamlines the search for the most valuable materials in a crowded field of information.
and Mitigation Strategies
The chapter identifies some of the penetration points of cyberattacks from an individual’s perspective and examines how an individual can work to minimize their risk of being hacked.
The global cyber insurance market is rapidly evolving and varies by geography. This paper provides a high-level overview of the global cyber reinsurance market, highlighting differences and similarities between regions and commenting on relevant history that shaped each region’s experience to date.