Risk Transfer Condition Report
For: Acme Financial Services, Inc.
Estimated for: April 23, 2024 to April 22, 2025
This assessment is for a particular profile. A profile can be built for an entire business, a business unit, a product line, a critical business application, and any other logical or physical business entity.
How to Use Your Assessment?
This assessment explores the next twelve months of your cyber risk condition from a financial perspective. It illustrates the major cyber themes and possibilities that may present themselves to your business, based on patterns formed between historical data, your unique business profile, and the macroeconomic cyber condition.
This is your business, and the estimates for the next twelve months is just one way to think about your cyber risk condition. Your business has experienced the realities of cyber risk in a different way. This assessment should be used in conjunction with your existing observations.
This assessment is not a prediction of a pre-determined future that precludes unknown conditions and changing human motivations. Use this assessment as a target at which to aim your actions. You are the agent of your cyber resilience strategy. Take what you need from this assessment to better manage, design, and communicate your cyber resilience strategy.
Executive Summary.
Your Risk Transfer condition is summarized in three metrics. Each metric provides an essential element in understanding and defining your risk transfer strategy.
Since Last Quarter.
Since last quarter, Your risk transfer benefit has worsened by 11.6% and your cyber exposure has improved by 32.0%.
Special note: You may notice a reduction in transfer benefit as cyber exposure improves. This outcome should be expected as risk mitigation diminishes the value of risk transfer.
Further Details.
Your cyber risk transfer condition is based on a combination of your exposure profile, asset applicability, threat and impact refinement, cyber maturity, cyber insurance details (if applicable), and a set of macroeconomic cyber risk conditions that further calibrate cyber incident severity and probability.
Cyber Exposure w/o Transfer
Cyber exposure (without transfer) is the sum of all possible impacts each multiplied by the probability of impact, which can be further expressed as a percent of annual revenue. Your cyber exposure (without transfer) includes the benefit of your control effectiveness but not the benefit of risk transfer.
Your current cyber exposure estimate is $46.8 million for the next twelve months, which can also be expressed as 1.87% of your annual revenue. To aid with making informed cyber risk decisions, cyber exposure if further divided into four exposure categories.
Question to ponder: Are you using your risk transfer mechanism to counteract your most significant cyber exposure category?
If you are not satisfied with your current cyber exposure, then you may want to focus on the "top 5 cyber insurance industry" recommendations. Each of these recommendations may improve your cyber exposure and may improve your cost of cyber insurance.
Opportunity for Improving Cyber Exposure - As Recommended by the Cyber Insurance Industry
The cyber insurance industry provides cyber risk recommendations to improve annual claims frequency. These recommendations are published by insurance brokers and carriers based on their independent analysis of the cyber risk condition.
The X-Analytics Research Team aggregates these recommendations to provide the "top 5 cyber insurance industry" recommendations. The prioritization of these recommendations may not align with your unique profile.
The following table illustrates the current "top 5 cyber insurance industry" recommendations. Next to each recommendation is a definition, your implementation of that recommendation, and the maximum opportunity considering a full implementation of that recommendation.
Insurance Industry Recommendation | Definition | Current Implementation | Opportunity w/ Full Implementation |
1.Attack Surface Management | Attack surface management is about reducing the size of the attack surface by disabling unnecessary services, restricting unapproved software, enabling firewalls, and enabling intrusion prevention solutions, and securing the network. | 67% | $3.41 milion |
2.Vulnerability Mitigation & Software Updates | Vulnerability mitigation is about remediating detected vulnerabilities and software updates is about keeping all software and applications up-to-date. Collectively, these concepts reduce weaknesses that can be exploited by an attacker. | 81% | $1.59 million |
3.Multi-Factor Authentication (MFA) | Multi-factor authentication (MFA) is about reducing an attackers use of compromised credentials by requiring something more than just a username and password. MFA generally requires something that you know and have to properly authenticate. | 100% | $0.00 million |
4.Data, Network, & Device Monitoring | Data, network, and device monitoring is about logging sensitive data access, logging network and device activity, and centralizing security event alerting. | 60% | $3.03 million |
5.Email and Web Browser Protections | Email and web browser protections is about improving protections and detections of threats from email and web vectors by disabling unauthorized web browsers and email clients, using DNS and URL filtering services, blocking unnecessary file types, and deploying email service anti-malware protections. | 60% | $2.30 million |
Total | $10.34 million |
Question to ponder: Besides the direct benefit to your cyber exposure, do you know if any of the above recommendations would also reduce the cost of your cyber insurance (as related to premium, deductible, or other costs)?
Transfer Benefit
Transfer benefit is the measure of how well your risk transfer mechanism reduces your cyber exposure. This value is represented as a percent value, and this value considers the details of your cyber insurance policy in relation to each cyber exposure category.
Your current transfer benefit is 9.9%, which means that your cyber insurance policy is removing $4.63 million from your total cyber exposure value. The following table displays your risk transfer benefit per exposure category and your total risk transfer benefit.
Exposure category | Exposure w/o transfer | Exposure w/ transfer | Transfer benefit |
Data breach | $1.14 million | $1.14 million | 0.00% |
Interruption | $36.12 million | $34.10 million | 5.60% |
Misappropriation | $1.67 million | $1.54 million | 7.92% |
Ransomware | $7.82million | $5.34 million | 31.66% |
Total | $46.75 million | $42.12 million | 9.9% |
Question to ponder: If you compare the cost of your cyber insurance policy with your risk transfer benefit, are you realizing a positive return on investment.
Your Cyber Insurance Policy
If your risk transfer benefit does need meet expectations, then you may want to consider modifying your cyber insurance policy. As a first step, you may want to review your current cyber insurance policy.
The following table summarizes your current cyber insurance policy.
Exposure Category | Insurance Detail | Value | Description |
Data Breach | Limit | $50.00 million | This is the highest amount your insurer will pay for a data breach claim that your policy covers. |
Data Breach | Retention / Deductible | $3.00 million | This is the portion of potential data breach damages that will be covered by your organization. |
Interruption | Limit | $50.00 million | This is the highest amount your insurer will pay for an interruption claim that your policy covers. |
Interruption | Retention / Deductible | $3.00 million | This is the portion of potential interruption damages that will be covered by your organization. |
Interruption | Waiting Period | 8 hours | This is the amount of time the policyholder must wait before some or all of their interruption coverage comes into effect. |
Misappropriation | Limit | $1.00 million | This is the highest amount your insurer will pay for a misappropriation claim that your policy covers. |
Misappropriation | Retention / Deductible | $0.10 million | This is the portion of potential misappropriation damages that will be covered by your organization. |
Misappropriation | Includes coverage for Fund Transfer Fraud (FTF) | Yes | This indicates that the policyholder can file claims related to misappropriation of funds. |
Misappropriation | Includes coverage for replacement of Intellectual Property or Trade Secrets | Yes | This includes that the policyholder can file claims related to misappropriation of intellectual property or trade secrets. |
Ransomware | Limit | $50.00 million | This is the highest amount your insurer will pay for a ransomware claim that your policy covers. |
Ransomware | Retention / Deductible | $3.00 million | This is the portion of potential ransomware damages that will be covered by your organization. |
Ransomware | Max duration of coverage | 20 days | This is the maximum ransomware duration that will covered by your insurer. |
Special Note: In addition to the above summary, your cyber insurance policy includes additional terms and conditions that ultimately define what your policy covers. Please review the "cyber insurance" section of the X-Analytics profile builder to see these settings or review your actual cyber insurance policy.
Opportunity for Improving Your Cyber Insurance Policy
If your risk transfer benefit is not meeting expectations, then you have two choices.
You can further mitigate your cyber risk and simultaneously reduce your need for risk transfer,
Or you can work with your insurance broker and carrier (prior to policy renewal) to best modify your cyber insurance policy.
The following table represents an abridged and prioritized list of policy modifications that you may want to consider.
Policy Modification | Transfer Benefit (as related to total cyber exposure) | Revised Cyber Exposure w/ Transfer |
1.Interruption retention at 25% of current value | 14.3% | $40.06 million |
2.Interruption retention at 50% of current value | 10.0% | $42.09 million |
3.Ransomware retention at 25% of current value | 8.2% | $42.94 million |
4.Ransomware retention at 50% of current value | 7.5% | $43.25 million |
5.Ransomware max duration coverage adjusted to 30 days | 5.4% | $44.24 million |
6.Ransomware policy at current configuration | 5.3% | $44.28 million |
7.Ransomware limit at 50% of current value | 4.9% | $44.45 million |
8.Ransomware max duration covered adjusted to 10 days | 4.9% | $44.47 million |
9.Interruption policy at current configuration | 4.3% | $44.73 million |
10.Interruption limit at 50% of current value | 4.2% | $44.77 million |
Special Note: Risk transfer benefit is just one way to analyze the value of your cyber insurance policy. You may also want to analyze coverage for worst-case (or black swan) cyber incidents.
For a thorough and aggregate analysis of cyber insurance modifications, please use the X-Analytics Risk Transfer Analyzer.
A Sample Analysis of Data Breach Coverage
The following table represents insurance coverage for a data breach scenario. Please visit the X-Analytics "Cyber Impact Estimator" for other data breach scenarios.
500 thousand record data breach | Median Impact | High to Worst-Case Impact |
Impact w/o transfer | $3.16 million | $6.1 million to $233 million |
Transferable impact | $0.00 million | $2.3 million to $47 million |
Transfer benefit | 0.0% | 37.4% to 20.1% |
Special Note: Worst-case impacts are extremely rare. The worst-case value includes severe direct, indirect, and opportunity damages. For example, a worst-case data breach may include significant regulatory fines.
A Sample Analysis of Interruption Coverage
The following table represents insurance coverage for an interruption scenario. Please visit the X-Analytics "Cyber Impact Estimator" for other interruption scenarios.
48-hour interruption incident | Median Impact | High to Worst-Case Impact |
Impact w/o transfer | $15.72 million | $40.9 million to $538 million |
Transferable impact | $2.92 million | $13.7 million to $47 million |
Transfer benefit | 18.6% | 31.8% to 8.7% |
Special Note: Worst-case impacts are extremely rare. The worst-case value includes severe direct, indirect, and opportunity damages. For example, a worst-case interruption incident may include significant brand/reputation damage.
A Sample Analysis of Ransomware Coverage
The following table represents insurance coverage for a ransomware scenario. Please visit the X-Analytics "Cyber Impact Estimator" for other ransomware scenarios.
10-day ransomware incident | Median Impact | High to Worst-Case Impact |
Impact w/o transfer | $52.05 million | $142 million to $827 million |
Transferable impact | $21.22 million | $47 million to $47 million |
Transfer benefit | 40.8% | 33.1% to 5.1% |
Special Note: Worst-case impacts are extremely rare. The worst-case value includes severe direct, indirect, and opportunity damages. For example, a worst-case ransomware incident may include significant extortion and recovery damages.
A Sample Analysis of Misappropriation Coverage
The following table represents insurance coverage for a misappropration scenario. Please visit the X-Analytics "Cyber Impact Estimator" for other misappropriation scenarios.
$6.25 million fund transfer fraud incident | Median Impact | High to Worst-Case Impact |
Impact w/o transfer | $3.06 million | $16.8 million to $21.0 million |
Transferable impact | $0.18 million | $2.3 million to 5.0 million |
Transfer benefit | 6.0% | 13.6% to 21.8% |
Special Note: Worst-case impacts are extremely rare. The worst-case value includes severe direct, indirect, and opportunity damages. For example, a worst-case "fund transfer fraud" incident may include significant brand/reputation damages.
Cyber Exposure w/ Transfer
Cyber exposure with transfer is a sum of all possible losses (with the benefit of impact replacement) each multiplied by the probability of that loss occurring. This value requires use of your insurance policy.
Questions to Ponder: Is your risk transfer strategy directly associated and tuned with your understanding of current and future risks? Additionally, is your risk transfer strategy aligned to your risk tolerance?
Cyber insurance is one option that can help protect your organization against losses resulting from a cyber incident. You cyber insurance policy may include protection against malice-based and error-based incidents. If you have specific questions about your cyber insurance policy, please communicate directly with your insurance broker and/or carrier.
Cyber insurance does not reduce the probability of incident, and it does not directly change the cost of incident. It is purely a mechanism to replace (or recover) a portion of costs post cyber incident. If your strategy is mainly about reducing cyber risk (or cyber exposure) then please visit the "X-Analytics Risk Mitigation Report" or review the next section of this report.
Opportunity for Improving Cyber Exposure - As Recommended by X-Analytics
The following table represents your top five recommendations for reducing your cyber exposure. Next to each recommendation is a definition, your current implementation of that recommendation, the maximum opportunity considering a full implementation of that recommendation, and if that recommendation overlaps with recommendations from the cyber insurance industry.
X-Analytics Recommendation | Definition | Current Implementation | Opportunity w/ Full Implementation | Cyber Insurance Industry Recommendation Overlap |
1.Data Protection | Data protection is about data identification, classification, secure handling, retention, and disposal. | 54% | $5.75 million | Data, network, and device monitoring |
2.Security Awareness and Skills Training | Security awareness is about influencing workforce behavior to be cybersecurity conscious and properly skilled to reduce adverse cyber incidents. | 71% | $3.72 million | Multi-factor authentication |
3.Access Control Management | Access control management is about creating, assigning, managing, and revoking access credentials and privileged for all accounts. | 65% | $3.49 million | Multi-factor authentication |
4.Inventory and Control of Software Assets | Inventory and control of software assets is about tracking software, updating the software inventory, and preventing use of unauthorized software. | 49% | $3.17 million | Attack surface management, vulnerability mitigation, and software updates |
5.Account Management | Account management is about maintaining a centralized inventory of all account, requiring the use of unique passwords, disabling dormant accounts, and restricting admin privileges. | 57% | $2.79 million | Multi-factor authentication |
Total | $18.92 million |
Special Note: Even though some "X-Analytics" recommendations overlap with "cyber insurance industry" recommendations, the overalp does not indicate complete alignment. There are countermeasures in the "X-Analytics" recommendations that are not included in the "cyber insurance industry" recommendations and vice versa.
Special Note: The opportunity with full implementation is based on cyber exposure (without risk transfer benefit).
For additional insights, please visit the X-Analytics Report Center.
In Summary
Your cyber risk transfer condition is summarized in three metrics. Each metric provides an essential element in understanding your risk transfer strategy.
Cyber Exposure w/o Transfer
1. Your current cyber exposure without transfer is $46.8 million (or 1.87% of revenue).
2. Since most of your cyber exposure is within the interruption category, you may want to review your current cyber insurance policy and see if there is an opportunity to further transfer the associated risk.
3. If you were to focus on the "top 5 cyber insurance industry" recommendations, you could further reduce your cyber exposure by 22%.
Transfer Benefit
1. Your current transfer benefit is 9.9%, which means that your cyber insurance policy is removing $4.63 million from your total cyber exposure value.
2. Out of all exposure categories, your cyber insurance policy best improves ransomware cyber exposure by 31.7%.
3. "Interruption retention at 25% of current value" is the best individual modification you may want to consider. This modification would further reduce cyber exposure by 14.3%.
Cyber Exposure w/ Transfer
1. Your current cyber exposure without transfer is $42.1 million (or 1.68% of revenue).
2. As part of your evolving cyber risk strategy, make sure your risk transfer strategy is tuned and associated with your understanding of current and future risks.
3. If you were to focus on the "top 5 X-Analytics" recommendations", you could further reduce your cyber exposure by 40%.
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