PREDICTIVE MODELING CONFERENCE Data Workshop Cyber Risk Models - PowerPoint PPT Presentation

PREDICTIVE MODELING CONFERENCE Data Workshop

• Cyber Risk Models • Loss Aggregation Models

Advisen’s Data Assets

CYBER RISK MODELS

Cyber Case Count over Time

Cyber Cases Entered per Day

Case Type Composition Total : 21,817

Distribution of Cyber Cases Response Economic Litigated Fines & Case Type \ Case Status Event Costs Loss Cases Penalties Total Digital Data Breach, Loss, or Theft 10,838 77 239 552 125 11,831 Privacy Violations 1,232 0 3 1,176 124 2,535 Improper Disposal/Distribution, Loss or Theft (Printed Records) 2,205 6 23 125 60 2,419 System/Network Security Violation or Disruption 2,036 22 59 33 10 2,160 Phishing, Skimming 609 1 71 34 4 719 Identity Theft/Fraudulent Use or Access 172 1 303 209 19 704 Improper Collection of Digital Data 278 0 1 287 42 608 Digital Asset Loss or Theft 90 0 14 20 2 126 Cyber Extortion 77 0 13 2 1 93 Undetermined/Other 51 0 0 0 0 51 Total 17,588 107 726 2,438 387 21,246

Mapping MSCAd Case Type Insuring Agreements Crisis Response and Notification Expenses Digital Data Breach, Loss, or Theft Electronic Theft Identity Theft/Fraudulent Use or Access Privacy Injury Liability Phishing, Skimming Privacy Event Response Improper Disposal/Distribution, Loss or Theft (Printed Records) Crisis Response and Notification Expenses Privacy Injury Liability Digital Asset Loss or Theft Loss or Damage to Insured’s Systems Electronic Theft Cyber Extortion Threats or Extortion Response Cyber Liability/System Security Liability Crisis Response and Notification Expenses System/Network Security Violation or Disruption Business Interruption And Extra Expense Loss or Damage to Insured’s Systems Cyber Liability/System Security Liability Improper Collection of Digital Data Crisis Response and Notification Expenses Electronic Theft Privacy Injury Liability Privacy Violations Privacy Event Response

Event Count by Company Size Company Type Company Size PRV PUB GOV NPR Unknown Total (0, 1M] 1,390 12 19 89 1,510 (1M, 10M] 1,569 17 57 114 1 1,758 (10M, 100M] 1,604 133 267 122 2,126 (100M, 1B] 1,596 469 317 116 2,498 (1B, 10B] 1,031 1,431 440 77 2,979 (10B, 100B] 181 2,277 403 6 2,867 (100B, ) 31 457 700 1,188 Unknown 1,900 59 560 108 35 2,662 Total 9,302 4,855 2,763 632 36 17,588

Case Count by Affected Count Affected Count Range Case Count (0, 10] 2,144 (10, 100] 1,809 (100, 1K] 2,363 (1K, 10K] 2,558 (10K, 100K] 1,450 (100K, 1M] 591 (1M, ) 366 Total 11,281

INDUSTRY GROUPING

SIC Classification Industry Event Count Litigation Count Fines/Penalties Agriculture, Forestry & Fishing 20 3 1 Finance, Insurance & Real Estate 2959 413 81 Manufacturing 993 174 14 Mining & Construction 115 30 8 Public Administration 2706 204 51 Services 7764 1278 172 Transportation & Public Utilities 952 248 44 Wholesale & Retail Trade 1733 471 26

NAICS Classification Industry Event Count Litigation Count Fines/Penalties Accommodation and Food Services 455 71 0 Administrative and Support and Waste Management and Remediation Services 594 152 18 Agriculture, Forestry, Fishing and Hunting 7 0 0 Arts, Entertainment, and Recreation 158 32 3 Construction 80 21 5 Educational Services 1400 50 5 Finance and Insurance 2432 365 63 Health Care and Social Assistance 1836 184 40 Information 1286 410 55 Management of Companies and Enterprises 127 11 5 Manufacturing 679 99 10 Mining, Quarrying, and Oil and Gas Extraction 24 0 0 Other Services (except Public Administration) 439 43 2 Professional, Scientific, and Technical Services 855 217 23 Public Administration 2083 165 42 Real Estate and Rental and Leasing 130 35 7 Retail Trade 861 314 16 Transportation and Warehousing 189 26 2 Utilities 63 9 0 Wholesale Trade 232 44 1

Industry Groupings: Methodology Look at NAICS 6 Level Does it meet the following criteria?  Case count > 90 No Yes  Company count > 2,000  Revenue sum > $50B  Frequency upper percentile threshold = 50% NAICS 6 Grouping Selected Look at NAICS 4 Level Does it meet the following criteria?  Case count > 100 Yes No  Company count > 15,000  Revenue sum > $300B  Frequency upper percentile threshold = 75% NAICS 4 Grouping Selected NAICS 2 Grouping Selected

Industry Groupings: Methodology • NAICS 6 Level – Grouping is selected only if • Case count > 90 • Company count > 2,000 • Revenue sum > $50B • Frequency upper percentile threshold = 50%

Example (NAICS6) Industry 522320 - Financial Transactions Processing, Reserve, and Clearing House Top Gain/Loss Industry Compared to Last Year Activities has the top event frequency increase, from 30 (2014-Q2) to 32 (2015-Q2) 2015-Q2 vs. 2014-Q2 Industry 522110 - Commercial Banking has the top average affected count increase, 10,000,000 from 83,991 (2014-Q2) to 3,211,535 (2015-Q2) (Click industry name and get insight) 522110 522320 - Financial Transactions Processing, Reserve, and Clea 1,000,000 Top Increase Average Affected Count (per event) Frequency 519190 - All Other Information Services 522320 522320 Top Decrease 518210 - Data Processing, Hosting, and Related Services 100,000 511110 - Newspaper Publishers 522110 - Commercial Banking Top Increase 522320 - Financial Transactions Processing, Reserve, and Clea Average 519190 519190 611310 Affected 10,000 519190 - All Other Information Services Count Top Decrease 518210 - Data Processing, Hosting, and Related Services 611310 - Colleges, Universities and Professional Schools * The dots stand for the numbers of 2014-Q2, and the arrows stand for the numbers of 1,000 2015-Q2. 100 0 50 100 150 200 250 300 350 400 Event Frequency (per $100B Revenue)

Industry Groupings: Methodology • NAICS 4 Level – Grouping is selected only if • Case count > 100 • Company count > 15,000 • Revenue sum > $300B • Frequency upper percentile threshold = 75% Case count threshold 100 Company count threshold (in K) 15 Revenue sum threshold (in $1B) 300 Frequency upper percentile threshold 0.75 NAICS NAICS Desc Case # Comp # (K) Rev ($1B) Rest case # Rest Comp # (K) Rest Rev ($1B) Freq/C # Freq/R SumValid Freq/C Valid Freq/R Sum Selected? 5111 Newspaper, Periodical, Book and Directory Publishers 225 29.6 701.8 130 21 416.6 6.3 0.31 6.29 0.31 TRUE 5112 Software Publishers 195 15.9 1,527.4 195 16 1,527.4 12.2 0.13 12.24 0.13 TRUE 5171 Wired Telecommunications Carriers 170 15.6 929.1 170 16 929.1 10.9 0.18 10.92 0.18 TRUE 5179 Other Telecommunications 175 19.1 689.0 175 19 689.0 9.2 0.25 9.16 0.25 TRUE 5221 Depository Credit Intermediation 1,125 74.2 4,737.7 220 35 824.3 6.4 0.27 6.37 0.27 TRUE 5222 Non-Depository Credit Intermediation 208 27.3 3,211.7 208 27 3,211.7 7.6 0.06 7.61 0.06 TRUE 5239 Other Financial Investment Activities 276 36.9 1,176.3 276 37 1,176.3 7.5 0.23 7.49 0.23 TRUE 5241 Insurance Carriers 501 19.1 8,359.3 501 19 8,359.3 26.2 0.06 26.22 0.06 TRUE 5412 Accounting, Tax Preparation, Bookkeeping and Payroll Services 116 38.2 343.7 116 38 343.7 3.0 0.34 3.04 0.34 TRUE 5614 Business Support Services 212 47.8 388.1 212 48 388.1 4.4 0.55 4.43 0.55 TRUE 6211 Offices of Physicians 504 215.8 957.1 504 216 957.1 2.3 0.53 2.34 0.53 TRUE 6219 Other Ambulatory Health Care Services 108 23.9 333.3 108 24 333.3 4.5 0.32 4.52 0.32 TRUE 6221 General Medical and Surgical Hospitals 788 26.6 4,130.8 788 27 4,130.8 29.6 0.19 29.60 0.19 TRUE 8139 Business, Professional, Labor, Political, and Similar Organizations. 220 71.3 535.0 220 71 535.0 3.1 0.41 3.09 0.41 TRUE

Example (NAICS4) Industry 5171 - Wired Telecommunications Carriers has the top event frequency Top Gain/Loss Industry Compared to Last Year increase, from 46 (2014-Q2) to 59 (2015-Q2) 2015-Q2 vs. 2014-Q2 Industry 5171 - Wired Telecommunications Carriers has the top average affected count 1,000,000,000 increase, from 12,083,423 (2014-Q2) to 240,774,098 (2015-Q2) 5171 5171 (Click industry name and get insight) 100,000,000 5171 - Wired Telecommunications Carriers Top Increase 5239 - Other Financial Investment Activities Average Affected Count (per event) 5112 - Software Publishers 10,000,000 Frequency 5241 5179 - Other Telecommunications Top Decrease 5614 - Business Support Services 5111 - Newspaper, Periodical, Book and Directory Publishers 1,000,000 5171 - Wired Telecommunications Carriers 5179 5179 5111 Top Increase 5241 - Insurance Carriers Average 5179 - Other Telecommunications 100,000 5239 Affected 5112 - Software Publishers 8139 Count Top Decrease 8139 - Business, Professional, Labor, Political, and Similar Org 6221 - General Medical and Surgical Hospitals 10,000 6221 * The dots stand for the numbers of 2014-Q2, and the arrows stand for the numbers of 2015-Q2. 1,000 5614 100 0 10 20 30 40 50 60 70 80 Event Frequency (per $100B Revenue)