Cyber Risk Financing: Boom or Bust?

How would the cyber insurance market react to a catastrophic loss? If rare events play a disproportionately large role in determining the properties of the cyber market, one of these events could send capital providers “running for the hills” (Ayers, 2023). In its report, “Cyber Risk: On the Edge of Insurability,” Conning specifically mentions the potential of this as the next black swan event.

“Conning envisions several possible paths for the cyber industry, including one where pricing gains in recent years and improved claims experience successfully attract more capital from both traditional sources and new players; and another where a catastrophic loss occurs,” shaking out capital providers and “reversing recent progress” (Ayers, 2023).



Ayers, E. (2023, July 18). A “surprising” cyber cat could stymie future market growth: Conning. Zywave | Advisen Cyber Front Page News.

Taleb, N. N. (2020). Statistical consequences of fat tails: Real world preasymptotics, epistemology, and applications: Papers and commentary. STEM Academic Press.