6 ms·

> On one hand, how are insurers supposed to properly cost... That's more or less the core competency of insurance providers...

krisrm 8y ago
Well, no argument there, but I wrote more words in that sentence that you cut off. My point is, that a "cyber attack" is poorly constrained, compared to something like a fire or a flood... a company only has so many assets, valued at $X that are liable to be burned to the ground or ruined by a flood, and these constraints can be modeled and adjusted for. Perhaps I am mistaken, I don't see a cyberattack as being analagous to anything else in the insurance industry.
- resoluteteeth 8y ago
  If it's so hard to model then why are these insurance companies offering "cyberinsurance" in the first place?
- rolph 8y ago
  perhaps riot or vandalism [acts of civil disobedience]
- sandworm101 8y ago
  >> compared to something like a fire or a flood Those are not easy things. People litigate the difference between fire and flood damage all the time. (Putting out a fire normally involves lots of water.) Sometimes flooding in building X even causes a fire in building Y. Is that covered by "fire" or "flood" insurance? The difference between various cyber attacks isn't substantively more complicated than any of the traditional insured risks. The issue is that insurers haven't invested in the experts needed to properly assess those risks. That is their problem to solve, not the customer's.
  - arcticbull 8y ago
    Agreed with everything you said, though 'its their problem to solve' should they decide to offer cyberattack coverage and sell it, otherwise it is the customers.
- arcticbull 8y ago
  Maybe I'm misunderstanding but aren't a fire and a cyberattack both capped at 100% of the value of the company? If the fire takes out the whole place, or a cyberattack empties out an equivalent amount from their bank accounts, the difference feels immaterial.
  - thfuran 8y ago
    What if a fire spreads to other properties not owned by the insured or destroys things on company premises but not owned by the company?
    - arcticbull 8y ago
      Fair point, I was wrong to say 100% of the property value, though I imagine the upper bound of the damage is fairly comparable in both cyber attacks and physical attacks.
- pbhjpbhj 8y ago
  Well a fire can do anything from cause a slight smell -- bread toaster or battery dropped in to a metal bin, maybe -- all the way to complete destruction of property and loss of lives, potentially ending the business. Seems relatively analogous in that respect to cyber attack?

krisrm 8y ago

Well, no argument there, but I wrote more words in that sentence that you cut off. My point is, that a "cyber attack" is poorly constrained, compared to something like a fire or a flood... a company only has so many assets, valued at $X that are liable to be burned to the ground or ruined by a flood, and these constraints can be modeled and adjusted for. Perhaps I am mistaken, I don't see a cyberattack as being analagous to anything else in the insurance industry.

resoluteteeth 8y ago
If it's so hard to model then why are these insurance companies offering "cyberinsurance" in the first place?
rolph 8y ago
perhaps riot or vandalism [acts of civil disobedience]
sandworm101 8y ago
>> compared to something like a fire or a flood Those are not easy things. People litigate the difference between fire and flood damage all the time. (Putting out a fire normally involves lots of water.) Sometimes flooding in building X even causes a fire in building Y. Is that covered by "fire" or "flood" insurance? The difference between various cyber attacks isn't substantively more complicated than any of the traditional insured risks. The issue is that insurers haven't invested in the experts needed to properly assess those risks. That is their problem to solve, not the customer's.
- arcticbull 8y ago
  Agreed with everything you said, though 'its their problem to solve' should they decide to offer cyberattack coverage and sell it, otherwise it is the customers.
arcticbull 8y ago
Maybe I'm misunderstanding but aren't a fire and a cyberattack both capped at 100% of the value of the company? If the fire takes out the whole place, or a cyberattack empties out an equivalent amount from their bank accounts, the difference feels immaterial.
- thfuran 8y ago
  What if a fire spreads to other properties not owned by the insured or destroys things on company premises but not owned by the company?
  - arcticbull 8y ago
    Fair point, I was wrong to say 100% of the property value, though I imagine the upper bound of the damage is fairly comparable in both cyber attacks and physical attacks.
pbhjpbhj 8y ago
Well a fire can do anything from cause a slight smell -- bread toaster or battery dropped in to a metal bin, maybe -- all the way to complete destruction of property and loss of lives, potentially ending the business. Seems relatively analogous in that respect to cyber attack?