Kovrr, a cyber risk modeling company, announced today it has developed an easy to use open framework to measure and understand catastrophic cyber risk exposure. The CRA-Zones™ framework defines the minimal elements needed to provide a view of cyber risk aggregations, allows for analysis across multiple portfolios of risks and allows for monitoring of exposure trends. CRA-Zones™ group cyber risk via a zone based on three elements; geography, industry, and entity size.
CRA-Zones™ were designed by Kovrr during their participation in the fourth cohort of Lloyd’s Lab, the insurance technology accelerator operated by the Lloyd’s of London re/insurance market. The framework has been designed with input from Lloyd’s market syndicates, cyber risk experts and cyber insurance industry professionals, who provided mentoring over the course of a 10-week program.
Laura Johnson, Cyber Practice Head at Chaucer, said “through the process of mentoring Kovrr, we were able to better understand the data and analysis behind this framework. CRA-Zones™ are a valuable tool for understanding and attaining insight for cyber risk exposure.”
While traditional catastrophic risk is typically associated with geographic proximity, additional elements must be taken into account to properly assess accumulated cyber risk. Kovrr built this framework after conducting extensive analysis of millions of events which showed a significant correlation between companies from the same location and industry tending to use the same third-party service providers and technologies, leaving them exposed to corresponding cyber attacks. Additionally, the analysis conveyed that entity size has a direct correlation to technologies used, cyber preparedness, security policies, cybersecurity spending, and level of sophistication of cyber attacks.
Trevor Maynard, Head of Innovation at Lloyd’s said – “I’m pleased to see Kovrr offering a new way to monitor cyber accumulations through an open framework. This novel idea is exactly what we hoped for when suggesting cyber as a theme for the Lloyd’s Lab. It goes to show the benefits our market is receiving from bringing exciting InsurTechs such as Kovrr to our innovation accelerator.”
“Kovrr’s goal was to allow all types of risk professionals regardless of their cyber modeling capabilities to use and benefit from the framework”, said Yakir Golan, CEO of Kovrr. “Risk professionals with limited data can gain insights on cyber risk accumulation without having to invest in heavy models and simultaneously insurers already heavily invested in cyber risk modeling gain additional value by attaining alternative views of their accumulated cyber risk.”