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Cyber security collaboration gives way to up-to-date risk model

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Two cyber security risk providers will collaborate with AIR Worldwide Corp., a Boston-based catastrophe risk modeling software provider, to an up-to-date cyber risk model for insurers, AIR said in a Monday news release.

Risk Based Security Inc., a Richmond, Virginia-based company that provides information security solutions and BitSight Technologies Inc., a Cambridge, Massachusetts-based organization that analyzes and rates the security level of company data, will work with AIR to build the AIR Cyber Risk Model, to assist the insurance industry in mitigating cyber attacks.

“Cybersecurity is viewed as a top priority for many companies, and the importance and value of security ratings have already been realized across numerous industries,” said Ira Scharf, general manager of worldwide cyber insurance at BitSight. “As more and more companies purchase cyber insurance, insurers are becoming increasingly concerned with aggregation risk. We’re collaborating with AIR to help them more accurately account for cyber risk in the entire supply chain, such as security vulnerabilities on hosting companies, cloud providers, and other third-party suppliers.”

“The pace of data breach activity shows no sign of slowing, despite the unprecedented focus on protecting systems and data from attack and compromise. In fact, if the current rate of disclosure continues, 2015 will be the worst year on record for the number of breach events reported,” said Inga Goddijn, executive vice president, Risk Based Security.

In addition to probabilistic loss estimation, the AIR Cyber Risk Model will offer a set of deterministic scenarios designed to help companies understand their aggregated risk from large-scale cyber attacks, the news release said.