TUESDAY
17.10.17
Insurers need to reach for the cloud
The re/insurance industry needs to embrace
are able to run that same model in an hour over
lunch.
Microsoft has been cooperating with RMS and
Silverman used the latter as an example. “When
RMS runs a model and the results that come back
are available in a cloud environment they can take
advantage of all the tools we have from a big data
perspective, not only to help with analysing the
data but also to make recommendations, as well as
spotting anomalies in their business models.”
Silverman stressed that people should not
be concerned about potentially important
information being released as a result of security
breaches in the cloud, largely because they do not
realise how secure the cloud can be.
“When we take our customers to a Microsoft
data centre and show them the difference
between how we do it versus how they do it, we
usually find that the customers walk away saying
‘wow, I don’t know why we’ve been so afraid of
the cloud, based on the way that Microsoft deals
with security and compliance and works with the
regulators’. They realise that the cloud isn’t as
risky as they thought it was.” n
the advantages in time and processing
power that the cloud can give their modelling and
other computer-generated planning processes,
Jonathan Silverman, director of insurance
industry solutions at Microsoft, told PCI Today.
“One of the things we started doing a number
of years ago was looking at the public cloud to
enhance the risk process. How could customers
and partners take advantage of cloud resources
in order to bring back results sets faster?
“As an example we did a test where we took
the world’s population, gave them all a $100,000
life insurance policy, ran a stochastic model
and estimated that if we ran it on a single core
processing unit it would take approximately 19
years to bring back the results,” said Silverman.
“We found that when we took that same
model and ran it on 50,000 cores the results
came back in under 90 minutes.”
He pointed out that when risk managers and
actuaries ran their models in the past, some of
those models would run for days. Today, with the
ability to ‘burst’—to use more cores—companies
Firms grasp importance of data assets, yet don’t insure risk
Organisations increasingly recognise the
growing value of technology and data
assets relative to historical tangible assets, yet
they are spending four times more budget on
insurance for property, plant and equipment
(PP&E) risks, a new report by Aon has revealed.
The 2017 EMEA Cyber Risk Transfer Comparison
Report, released by Aon in collaboration with the
Ponemon Institute, a research firm on privacy,
data protection and information security, found
that while 38 percent of businesses surveyed
confirmed they have experienced a cyber loss
in the past 24 months, only 15 percent of their
probable maximum loss (PML) is covered by
insurance.
This is in stark contrast to the policy limits
purchased against physical assets like PP&E,
where around 60 percent of their PML is
typically covered. The report also shows that
the impact of business disruption to information
assets is 50 percent greater than to PP&E.
“Our goal is to compare the financial statement
impact of tangible property and network risk
exposure,” said Larry Ponemon. “A better
understanding of the relative financial statement
impact will assist organisations in allocating
resources and determining the appropriate
amount of risk transfer resources to allocate to
the mitigation of network risk exposures.”
Vanessa Leemans, chief operating officer for
Global Cyber Insurance Solutions at Aon added:
“This study compared the relative insurance
protection of certain tangible versus intangible
assets. We found that most organisations spend much
more on fire insurance premiums than on cyber
insurance, despite stating in their publicly disclosed
documents that a majority of the organisation’s
value is attributed to intangible assets.”
The report also found that only 30 percent
of businesses are “fully aware” of the legal and
economic consequences of European Union
General Data Protection Regulation (GDPR).
GDPR comes into effect on May 25, 2018, and
introduces a 72-hour notification for all personal
data breaches—except those unlikely to pose a
risk to individuals.
Fines for non-compliance with the GDPR
will increase to as much as €20m or 4 percent of
an organisation’s global turnover (whichever is
higher). Insurance carriers are starting to see an
increase in demand for cyber coverage as cyber
exposure awareness becomes an enterprisewide
issue.
Leemans concluded: “With 65 percent of
EMEA organisations expecting their cyber
risk exposure to increase over the next two
years, cyber risk needs to be approached at an
enterprise-wide level in order to achieve cyber
resilience.
“This should include enterprise-wide
education, assessment and quantification,
preventive risk management, and incident
response plan, as well as cyber insurance.” n
News
Jonathan Silverman
12 | PCI TODAY | DAY 3: Tuesday October 17 2017 www.intelligentinsurer.com | www.bermudareinsurancemagazine.com