In today’s world, cyber threats are becoming increasingly sophisticated and frequent. With this increased risk, cyber insurance brokers are looking for ways to more accurately assess the risk of potential clients to offer them the right cyber insurance coverage at the appropriate cost. Trying to find this equilibrium has meant that new methods such as cybersecurity performance management (CPM) are becoming an increasingly critical process for businesses and insurance brokers to evaluate their cybersecurity posture. We want to explore how CPM can help cyber insurance brokers evaluate risk.
What is CPM?
Cybersecurity Performance Management is a framework that involves monitoring and measuring an organization’s cybersecurity performance against established metrics and benchmarks. By doing so, businesses can identify potential weak points and gaps in their security posture. This insight provides key decision-makers with all the tools they need to take corrective actions to improve their cybersecurity posture. In the context of cyber insurance, it also means that being able to demonstrate to brokers that you have a robust cybersecurity program in place could reap tangible benefits in the form of lower insurance premiums and simplifying reporting requirements.
These cybersecurity performance indicators (CPIs) are used to assess the organization’s cybersecurity posture. Examples of CPIs include the number of days it takes to remediate a vulnerability, the time taken to detect and respond to incidents, the percentage of users enrolled in multifactor authentication, and the percentage of systems that are enrolled with endpoint protection. Collecting and analyzing this data provides actionable improvements for organizations to implement. For insurance brokers, it provides the tools necessary to not only better meet their clients’ needs but prevent insolvency from catastrophic losses.
Cyber insurance brokers can leverage this approach to evaluate the risk of their clients. The best indicator of an organizations’ overall cybersecurity maturity is not in how many advanced tools are deployed within their technology stack, but in how well they perform the day-to-day basics of cybersecurity. By analyzing an organization’s cybersecurity performance metrics, cyber insurance brokers can better understand the risk of cyber threats and determine the appropriate level of cyber insurance coverage needed to mitigate these risks.
How CPM helps insurance providers
We have identified 3 key ways cybersecurity performance management can help cyber insurance brokers evaluate risk:
- Assess the effectiveness of cybersecurity measures
- Identify potential risks and vulnerabilities
- Evaluate the impact of a cyber attack
Cyber insurance brokers can use CPM to assess the effectiveness of an organization’s cybersecurity controls. By evaluating an organization’s cybersecurity performance metrics, brokers can determine whether the organization’s security measures are sufficient to prevent or mitigate cyberattacks. If performance metrics indicate that their potential policyholder routinely lets critical vulnerabilities sit unpatched for weeks on end, they represent a significantly higher risk than an organization that patches them within 3 days.
These cybersecurity performance metrics can also inform cyber insurance brokers of potential risks and weaknesses that may make potential claimants susceptible to cyberattacks. Even if a potential policyholder has vulnerability management down pat, if they don’t have multifactor authentication enabled across the organization then they are still at elevated risk to phishing and credential stuffing attacks. This information can help insurance brokers determine the appropriate level of cyber insurance coverage required to mitigate these risks.
The final significant factor brokers consider when assessing risk is the potential impact of a cyberattack. By analyzing an organization’s cybersecurity performance metrics, brokers can assess the potential impact of a cyberattack on the organization, including the cost of the damage, data loss, and recovery time. These factors, along with the likelihood of an attack, will greatly impact the level of coverage necessary. If performance metrics indicate that the company in question hasn’t had a successful backup of crown jewel assets in 6 months, the potential fallout of a ransomware attack could be catastrophic to the business—resulting in a big claim to insurance providers.
Overall, cybersecurity performance management is an essential tool for cyber insurance brokers who need to evaluate risk and determine the appropriate level of coverage for their clients. By continuously monitoring and assessing an organization’s cybersecurity posture, CPM can help brokers make informed decisions about risk. TDI’s CPM automation platform CnSight® is nominated for best Cybersecurity Industry Solution for Cyber Insurance. Contact us today to learn more about how CPM and CnSight® can help!
