Understanding Cyber-Risk and Cyber-Insurance

Gareth W Peters, Pavel V Shevchenko and Ruben D Cohen

WHAT IS CYBER-RISK FROM A FINANCIAL RISK AND INSURANCE PERSPECTIVE?

There is an increasing focus on IT and cyber-related risk and insurance. The primary reason is that organisations of all sizes in both the public and private sectors are increasingly reliant on information and technology in order to execute business processes that support the delivery of services.

If there is a breakdown or failure in these systems, the organisation will realise a direct negative impact on the processes it supports, resulting in reduction of service and disruptions that ultimately impact on the organisation’s ability to meet its objectives.

Emerging fintech firms have taken on increased importance to improve risk management with financial technology. Given the importance of cyber-risk and the trends of increasing risk-management techniques, to a wide spectrum of organisations and individuals, it is not a surprise that there is a variety of views on how to classify and think about cyber-risk loss event types.

In this section we begin with an introduction to the different views of cyber-risk that have emerged in recent years, which includes an overview of cyber-risk