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FICO (San Jose, Calif.) has introduced an insurance dashboard for its Enterprise Security Score, which the vendor says underwriters can use to understand their exposure and make more accurate pricing and portfolio decisions. The dashboard lets underwriters embed individualized risk assessment for each policy in their portfolio analysis, including dependency/vendor risks, giving the underwriter greater flexibility in modelling various risk scenarios, according to FICO.
“This is a big step forward for cybersecurity insurance, which is one of the newer forms of business insurance,” comments Doug Clare, VP, FICO. “Just as lenders use the FICO Score to understand risk at the consumer and portfolio level, the FICO Enterprise Security Score shows insurers risk across their cybersecurity book, based on a very detailed, policy-level risk assessment. We’re seeing a lot of interest from insurers in using these powerful tools.”
Underwriters using the dashboard can do the following, as described by FICO:
- Calculate a range of risk metrics, such as probable maximum loss (PML).
- Inject the organization’s historical distribution information on overall claimable loss and losses in subcategories such as legal fees and crisis management, to determine a much more granular and accurate exposure assessment catered to their market segment.
- Simulate various risk scenarios and model their financial risks under a variety of complex conditions.
- Model both primary insured risk and risk from primary insureds’ fourth-party relationships.
- Review risks at a policy, portfolio and book-of-business level.
- Include historical claim and performance data as well as policy terms into the overall financial picture.
- Model potential failures at common fourth-party vendors, in order to find hidden dependencies across their portfolios.
The vendor describes the FICO Enterprise Security Score as performing a complex assessment of an organization’s network assets, applies advanced predictive algorithms, and then condenses the results down to a three-digit score that rank-orders based on the odds of breach for the organization. FICO says companies can use the Score to understand and track their own performance, or evaluate the security risk of their vendors and other business partners.
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