Cyber reinsurers accomplish a tremendous amount with limited time and resources, driving both their own growth, and the growth of the entire market. However, many of the obstacles they face lie outside out of their control, making them difficult to surmount, as discussed in the first blog of this series — 4 Key Challenges Impacting Cyber Reinsurance Growth.
Fortunately, there are solutions that can help insurers overcome these difficulties.
This blog will detail the practical levers that can empower reinsurers to elevate their performance from good to great.
Standardize and strengthen your data
Accessing the right data at submission can be challenging when there’s no consistent schema in place. Many reinsurers are working around this challenge with tailored, manual approaches. But, as we heard from insurance carrier clients in the previous blog, the progress made to improve data quality and completeness has been plateauing, and so a different solution could help.
A cyber modeling partner can help fill these data gaps, so instead of wasting time piecing together fragmented data, reinsurers can have it all in hand — creating consistency and standardization. The right solution can also help reinsurers analyze actual data and compare books of business directly, enabling them to quickly make more confident decisions.
Bridge the ‘18-month’ visibility gap
With cyber risk constantly evolving, reinsurers may be relying on outdated or backward-looking data. Between the ever-changing threat landscape and general market changes, we hear from clients that there is a visibility gap that they are trying to work around. Reinsurers are navigating this rapid evolution well, but it can be hard to manage risk proactively.
To overcome this challenge, reinsurers would benefit from real-time intelligence. A modeling solution that delivers the ability to forecast and detect trends would allow reinsurers to monitor and anticipate:
- Exposure shifts across cedants
- Incident likelihood by geography, size, industry, etc.
Leveraging the right intelligence would enable reinsurers to become more proactive in their risk management strategies and more confident in their forward-looking investments.
Uncover hidden risk concentrations
Hidden risk concentrations within cyber portfolios bring additional limitations that reinsurers are constantly trying to traverse. Although reinsurers make deliberate efforts to diversify across cedants and coverages, the lack of market standardization makes precision difficult, especially when risks include small and medium businesses (SMBs) in vulnerable sectors.
Cyber reinsurers need to be able to see the nuances of a portfolio in order to uncover a comprehensive view of hidden risk concentrations. This means leveraging analytics that provide segment-level risk insights, dissecting portfolios by:
- Industry segment
- Company size
- Region
- Security quality
- Insurance terms and conditions (such as limit, attachment point and deductible)
The right analytics can deliver these deeper insights, revealing a more comprehensive view of a cedant’s cyber risk posture. This allows reinsurers to make more confident risk management decisions.
Reduce operational pressure with specialized tools
A challenge CyberCube often hears about is teams not having enough dedicated resources for cyber reinsurance. Some organizations will instead fold cyber reinsurance into broader reinsurance and underwriting teams. This can create operational pressure during renewal season, where actuaries and underwriters are pulled in various directions.
This is not mismanagement on the part of the reinsurer, nor is it a lack of ambition on the part of their teams. Rather, the tight turnarounds make it difficult to accurately assess cedant portfolios without deeper insights. A specialized modeling solution could help alleviate this pressure and scale the operation, offering necessary analytics quickly and without workflow interruptions. With the right data-backed analytics, cyber reinsurers would be able to easily question assumptions and negotiate where necessary.
Elevate portfolio visibility for a competitive edge
As cyber reinsurance has grown, reinsurers have done a tremendous amount of work to understand and navigate the different obstacles to growth. But without real justification for dedicated cyber resources, it becomes difficult for the market as a whole to progress. Unlocking growth will require an efficient, effective solution.
Small shifts in operations, like leveraging analytics across teams at the right stages of the workflow, will get reinsurers closer to unlocking that next level of growth while allowing them to maintain profitability. High-performing teams just need an edge in order to gain higher portfolio visibility — and the right cyber modeling partner can help reinsurance teams access this edge, turning complexity into clarity.
The right modeling partner: CyberCube
Cyber reinsurers don’t need to navigate this complex landscape alone. The stakes are high, and the pace is fast, but with the right partner, reinsurers can shift to a sharper, more proactive strategy.
CyberCube’s cyber risk modeling capabilities are built specifically to support the nuanced needs of reinsurers, empowering teams to operate with greater clarity, confidence, and control. When reinsurers have access to deeper insights, more efficient workflows, and the tools designed for cyber’s unique dynamics, they gain more than just visibility — they gain a competitive advantage. Now is the time to unlock that next level of confidence and performance and push the cyber reinsurance market forward.
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