Potential losses can be lowered by more than 40% through diversification and close to 60% by mitigation practices

LONDON: Increased diversification and mitigation across a portfolio can have a significant impact in decreasing a (re)insurers’ exposure to catastrophic cyber risk, according to new research by CyberCube, the market leader in cyber risk analytics.

The analysis, using CyberCube’s catastrophe model Portfolio Manager v6 (PM v6), highlights that increasing diversification across geography, revenue, industry, and technology can significantly reduce cyber risk, lowering potential losses by up to 42%. Security posture also matters greatly with the cyber hygiene of insured enterprises having material implications for portfolio performance and capital requirements. Strong patch management, network segmentation, and robust backup protocols can decrease modeled tail losses by up to 57% across perils – and greater still when focusing specifically on widespread ransomware events.

“The cyber insurance market has experienced rapid and sustained growth over the past several years, emerging as a catastrophe (CAT)–exposed and capital-intensive line of business,” said Jon Laux, CyberCube’s Vice President of Analytics. “This trajectory, while promising, heightens the need to understand the role of diversification and risk mitigation—two themes that have been extensively examined in natural catastrophe insurance, but remain comparatively underexplored in cyber.”

The report: “Reducing Cyber Catastrophe Risk: Diversification and Mitigation in Action,” states continued risk diversification can be gained if market growth continues beyond the US, with a balance of exposures by company size, industry, and/or technology. However, insured cyber risk is still heavily concentrated in the United States, which accounts for roughly two-thirds of the current global cyber insurance market. Single Points of Failure (SPoFs) are still US-centric, with many of the most significant tail risk events tied to US-based technologies, particularly operating system providers and major cloud service providers.

Nevertheless, although the full benefits of diversification may be difficult to achieve due to extant market dependency on US policyholders and technology firms, over time this geographic concentration will reduce as other insurance markets expand and mature. Over the next few years, European and Asian countries are expected to see faster market growth than the US.

In July 2025, CyberCube released the latest version of Portfolio Manager. Key changes made in PM v6 followed extensive research with internal and external cyber experts to understand what would best prepare organizations to avoid the consequences of catastrophic events. The report “Reducing Cyber Catastrophe Risk: Diversification and Mitigation in Action” reflects the rationale behind the changes. Read the full report here – Reducing Cyber Catastrophe Risk: Diversification and Mitigation in Action

CyberCube is the leading provider of software-as-a-service cyber risk analytics to quantify cyber risk in financial terms. Driven by data and informed by insight, we have harnessed the power of artificial intelligence to supplement our multi-disciplinary team. Our clients rely on our solutions to make informed decisions about managing and transferring cyber risks. We unpack complex cyber threats into clear, actionable strategies, translating cyber risk into financial impact on businesses, markets, and society as a whole.

The CyberCube platform was established in 2015 within Symantec and now operates as a standalone company. Our models are built on an unparalleled ecosystem of data and validated by extensive model calibration, internally and externally. CyberCube is the leader in cyber risk quantification for the insurance industry, serving over 100 insurance institutions globally. The company’s investors include Forgepoint Capital, HSCM Bermuda and Morgan Stanley Tactical Value. For more information, please visit www.cybcube.com or email info@cybcube.com

Fonte: Business Wire