AI and the Future of Actuarial Science
When cyber insurance was first introduced almost 30 years ago, the cyber threat landscape looked much different. We were far less reliant on digital technology and data, it was much more difficult for threat actors to monetize attacks, and penalties for data privacy and cybersecurity failures were still being developed.
The actuarial models adapted from traditional insurance were sufficient during the foundational years, but a new era in cyber insurance is upon us. In fact, we’ve been living in it for a while now.
The tools and data at our disposal have revolutionized the way we understand risk. Remote access is now the default, not the exception. Cybercriminals operate like businesses. The prevalence of cloud-based technologies and automation makes risk aggregation a real concern. Plus, artificial intelligence (AI) has introduced a whole new set of exposures we’re still trying to understand.
Traditional risk models simply can’t keep up with the dynamic cyber risk landscape. We need to retool our approach to actuarial science — and AI can help.
With more information and advancements in technology come more questions and bigger problems to solve. Cyber insurance is no different. With access to data and AI to assist, here are some of the new challenges and a roadmap for how we can confront them.
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