Threading the Data Needle...
"Silent Cyber" risk is looming over the insurance industry. Read about this persistent issue, and what carriers and brokers can do to avoid its impacts in our whitepaper.
The Exponential Increase of IoT Data
The amount of data being generated around us is transforming the way we live today and will continue to alter what’s possible in our world. Our pockets contain powerful computers which track and transmit where we go, who we communicate with, which websites we visit, and help us capture pictures and videos of the places we visit. Our homes contain video cameras, electronic thermostats, and even new refrigerators upload our data to the “cloud”. Inexpensive IoT sensors track useful (and sometimes useless) data, including temperature, humidity, light levels, and location data. Their usage is increasing exponentially. Virtually every activity we and our sensors do creates a digital trace. Recently, data overtook oil as the world’s most valuable asset (via The Economist). What if we used this data to help determine risk and help us prevent adverse events?
The CrowBar: Corvus' Solution to "Silent Cyber" Risk
That is part of the reason that Corvus is building the CrowBar, our commercial insurance platform used by Brokers and their clients, and Corvus Underwriters. The CrowBar provides an online, digital experience so our users can get their work done more efficiently and with greater insight. The CrowBar effectively uses new sources of data such as IoT sensors, mobile devices, and security scans to create a powerful, data-driven experience for our users.
One of the product/engineering design principles in building the CrowBar is KISS or Keep It Simple Stupid, first noted by the US Navy back in 1960. The KISS principle states that most systems work best if they are kept simple rather than being made complicated; therefore simplicity is a key goal in design, and unnecessary complexity is avoided. Since the CrowBar is able to leverage external data sources to help our Underwriters assess risk, we are able to provide a “simple” yet powerful experience for our end users. Look at a traditional typical cyber security application: customers fill out PAPER forms (or a PDF), typically having double-digit pages and HUNDREDS of questions. It is a dreadful experience for the applicant and is completely subjective, no external data is leveraged.
Benefits of the Corvus Smart Cyber Experience
The Corvus Smart Cyber experience starts with an ONLINE questionnaire which is comprised of a few questions which are dynamically updated as questions are answered; there is no need to fill out unnecessary or irrelevant questions which are typical in the paper forms. Corvus uses the answers from the questionnaire to get even more data through automated means which provide us with a comprehensive cyber security profile using non-intrusive security scans as well as other sources of publicly available data. Corvus then applies artificial intelligence and machine learning techniques to the data to help us stratify customers into groups who are at risk and those who are less at risk. This helps us correctly price our products and helps us determine which coverages can be added to our insured’s cyber policies, rewarding cyber-safe customers with better rates and additional coverages. What’s even better is the CrowBar provides customers with our Dynamic Loss Prevention Guide which has specific recommendations to help them improve their risk profile and reduce their security risks. All parties win - claims go down for Corvus allowing us to offer broader coverage and more analysis. Now that’s making good use of our world’s newly available data
It is predicted that by 2025, our world will be generating 163 ZETTABYTES worth of data per year (a zettabyte is one trillion gigabytes, that’s a lot of hard drives folks!) Check out this Forbes article for ideas on how we will collectively manage all this data. Self-driving cars will probably create and process up to 100 Gigabytes of data per second!
Corvus aspires to continue to use this plethora of data in meaningful ways to help us achieve our mission: to make the world a safer place by helping organizations mitigate or eliminate the impact of adverse events. If we continue to harness the right data effectively, I am sure we will succeed.
The rise of remote work and growing concerns over ransomware acted as partners-in-crime to get organizations to hone in on risk mitigation efforts over the past couple years. Through compiling our Risk Insights Index, we found that with certain initiatives — safer or reduced usage of RDP, growing use of email security tools, and other measures taken to limit the impact of threat actors — businesses are more prepared than a year before and ready to play defense. Those efforts are borne out in our finding that the rate of companies who pay a ransom when attacked with ransomware fell by half within a year.
The whisperings of “firming rates” start first, quietly in business meetings, then published in industry reports. Soon to follow, rumblings of a “hard market” are brought to the conversation. It’s cyclical in nature, and we see it across all insurance lines at one point or another. For years, Cyber Insurance stretched far and wide with “soft” market conditions, remaining highly profitable. Now that period of growth, with exceedingly available coverage and inviting terms, has stalled in the face of a hard market.