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How to improve your portfolio management decisions with SPoF Intelligence

The rise of cyber risk accumulation events has meant that cyber (re)insurers must pay more attention to Single Points of Failure (SPoF) within their insureds’ digital supply chains

  • 5 Minute Read

The rise of cyber risk accumulation events has meant that cyber (re)insurers must pay more attention to Single Points of Failure (SPoF) within their insureds’ digital supply chains. Recent cyber attacks such as SolarWinds, Microsoft Exchange, Colonial Pipeline and GoDaddy demonstrate why getting ahead of potential risk is key to profitability. 

So how can you get ahead of this supply chain aggregation risk?

The answer is with cyber risk analytics. CyberCube provides best-in-class data analytics so (re)insurers can understand their cyber risk and make informed, profitable decisions. Our SPoF Intelligence solution specifically helps you identify, understand and manage potential accumulation risks within your portfolio, and Portfolio Manager can help quantify the potential impact to your portfolio(s) if similar accumulations were to occur.

This blog explores how SPoFs are changing, what you need to know about modeled and non-modeled SPoFs, and how SPoF Intelligence delivers the necessary data around cyber accumulation hotspots in your portfolio.

The evolution of SPoFs

We define SPoFs as the targeted entity for a given attack scenario that has multiple dependent and interconnected entities. SPoF attacks are becoming increasingly common, as shown by recent cyber attacks mentioned above. These examples demonstrate why getting ahead of potential risk is key to profitability. 

Threat actors are learning to target new SPoFs that have not previously been a point of focus, such as open-source software (OSS), VM hypervisors, and VPN products. These growing trends show how threat actors are adapting quickly in order to exploit organizations’ vulnerabilities. It’s more important than ever for (re)insurers to understand their exposure to SPoFs, which cyber analytics can help with.

Understanding SPoFs is key to profitability

Understanding SPoFs can help you better manage your portfolio, both from a risk accumulation perspective as well as a loss aggregation perspective. Modeling SPoFs is a critical component of a robust cyber catastrophe model, which is why you need a solution that is able to manage SPoF accumulations reliably — this is where CyberCube’s SPoF Intelligence solution comes in. An effective cyber modeling solution that tracks SPoFs, like CyberCube’s SPoF Intelligence, provides: 

- Sufficient quantity of data to develop insights
- Validation of data quality for accuracy and completeness
- A model agnostic view of technology dependencies

So how can understanding SPoFs lead to profitable decisions?

If you have already incorporated well-grounded cat models, such as CyberCube’s Portfolio Manager, you can dig into the detailed result output and see whether your losses are driven by certain SPoFs. This enables more proactive decision-making when determining whether to underwrite submissions or when thinking about how to diversify your portfolio to mitigate risk. When extending this process to the point of underwriting, (re)insurers can also determine how a specific company’s technology dependencies will impact the portfolio’s risk accumulations.

Proactively manage your portfolio’s SPoF concentrations at the point of underwriting with technology dependency data within CyberCube’s single-risk underwriting solution, Account Manager 

What SPoF Intelligence delivers

SPoF Intelligence launched in Spring 2021 and has been invaluable in helping our (re)insurance clients understand how SPoFs drive our catastrophe model, and their impact on any particular portfolio. CyberCube’s model collates multiple data sources that use a variety of collection methods to determine which companies show evidence of depending on particular providers and technologies.

How SPoF Intelligence identifies exposures

SPoF Intelligence shows how a provider or technology could cause an accumulation event in CyberCube’s models, as well as a detailed list of dependencies for the companies in a portfolio to each of those SPoFs. 

SPoF Intelligence delivers metrics that include:

  • - Summary scores on exposure, security, and market share
  • - Historical breach information
  • - Frequency and severity of outages
  • - Critical vulnerability count

The scenario classes in our model, and the respective list of SPoFs being attacked, are curated to be the most pertinent and well-grounded representations of cyber risk for the purposes of catastrophe risk management. SPoF Intelligence provides a deeper view into the dependencies and interconnectedness of these modeled SPoFs within your portfolio. This includes additional insights into their exposure and security posture — having this data, alongside expert scores, is critical to modeled SPoFs as it provides a more holistic view of a company’s risk to accumulation events. 

Modeled vs non-modeled SPoFs

Generally, most solutions on the market provide modeled SPoFs — including CyberCube’s offerings, which model potential financial losses. Although modeled SPoFs are important, it’s impossible to model every SPoF that can be attacked. Non-modeled SPoFs also need to be considered as these can lead to accumulation risk within a portfolio. 

Non-modeled SPoFs are a way to capture the emerging risk in areas that are newer to the threat landscape, where there are fewer historical attacks that can be used as data points. CyberCube’s SPoF Intelligence module aims to do just that, while also providing robust cat models based on modeled SPoFs. 

CyberCube’s non-modeled SPoFs feature

With the release of the “non-modeled SPoFs” feature, SPoF Intelligence expands to support tens of thousands of unique SPoFs. This represents hundreds of millions of detailed dependencies from individual companies to those SPoFs. This allows the use of SPoF Intelligence as a pure exposure management tool that can help you understand the very thorny subject of cyber concentration, making it even easier for you to identify where potential accumulation events could occur, and make informed decisions to mitigate the risk. 

Make profitable decisions with a reliable cyber modeling solution

With SPoF attacks on the rise, you need reliable data that can help you pinpoint potential SPoF attacks and financial losses. Managing your cyber insurance portfolio to avoid these attacks and prioritize profit doesn’t need to be difficult — it’s all about choosing the right cyber modeling solution that provides the necessary information. 

Here at CyberCube, we not only understand your insurance goals, but we also understand the evolving cyber threat landscape and how it will impact the cyber insurance market. When thinking about cyber accumulation risk and SPoF attacks, CyberCube’s analytics solutions can provide the modeling you need to best manage your portfolio. 

If you’d like to find out more about SPoF Intelligence and how it can help improve your cyber insurance portfolio management decisions, get in touch with us today.

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