US cyber loss index expanded to include unintentional events
US cyber loss index expanded to include unintentional events | Insurance Business America
Cyber
US cyber loss index expanded to include unintentional events
New reporting for accidental cyber losses starts in October
PERILS and CyberAcuView, a US-based entity formed by leading cyber insurers, have announced the expansion of the US Cyber Industry Loss Index to include unintentional (accidental) loss events. This addition will take effect on October 1, 2024.
Launched in September 2023, the index has focused on reporting affirmative US primary cyber market losses caused by intentional (malicious) systemic cyber events.
These events trigger reporting when industry losses exceed $500 million and the data has been used in insurance-linked securities (ILS) and industry loss warranty (ILW) transactions related to cyber risks.
Over the past year, PERILS and CyberAcuView have engaged with major stakeholders in the industry to build awareness around the index and gather feedback. Following these discussions, the organizations decided to expand the index’s scope to include unintentional systemic cyber events from October 2024 onwards.
PERILS noted that the reporting methodology for intentional cyber events remains unchanged. It will also apply to unintentional cyber events that result in industry losses of over $500 million. Both PERILS and CyberAcuView will collaborate to classify an event as intentional or unintentional based on the primary cause of the incident.
Darryl Pidcock (pictured above), head of cyber at PERILS, emphasized the importance of market engagement in the decision to expand the index’s scope.
“That engagement is not only critical to increasing its use but also expanding its scope,” Pidcock said. “Our decision to widen the remit of the index to unintentional cyber incidents was a direct result of our continuous market dialogue.”
Mark Camillo, chief executive of CyberAcuView, also commented that the expanded reporting will help the industry address its need for more comprehensive cyber data to improve modeling and sustain long-term cyber market capacity.
“We feel the addition of unintentional loss reporting can play an important role in enabling the expansion of the cyber-ILS and ILW markets,” Camillo said.
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