As Geoji said “catastrophes force you think about what your crown jewels are,” what it would cost to lose those key assets, whether your security readiness could handle a disaster, and how much insurance you should buy.
Watch the video: Catastrophic Risk Modeling with FAIR - requires a free FAIR Institute membership (join now).
Catastrophic risk modeling has been a proven standard in the insurance industry since Hurricane Andrew of 1992, Ben explained.
Hurricane hazard modeling combines four modules – and each closely resembles an element in the FAIR model:
As a result of this research, you should have a good grasp of:
“You will almost certainly have model losses that make you uncomfortable when you are considering catastrophic events,” Geoji warned. “...The best way to use numbers is to use exceedance probabilities,” in particular as a guide to how much cyber insurance to buy. He also recommended limiting to three or four catastrophic scenarios, as a way of aggregating exceedance probability.
Hair-raising though the exercise may seem, “once you establish something like this, it will be an incredible asset to see how this curve is shifting [over time] that will actually serve as your baseline and you can see how it moves up and down based on the investments that you are making or how the threat landscape is changing.”
Watch the video presentation on catastrophic cyber risk modeling now.
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