Actuaries get teased for what some outsiders see as a boring job. But a new report makes clear that actuaries are increasingly part of the interesting, sometimes even exciting, world of cybersecurity. Nowadays actuaries and cyber insurance increasingly go together, details the report from the UK’s Institute and Faculty of Actuaries (IFoA).
Entitled “Actuaries Managing Cyber Risk,” the report provides analysis and insights from survey responses from the field. “Where actuaries have previously trained and built experience around financial risks, it is important now to ensure knowledge in operational risks, and in particular those arising from the increased digitisation of the world, including cyber,” according to the report, which notes actuaries are being teamed with cyber and other experts to develop risk models and other analysis important for cyber insurers and corporate executives.
Actuaries and Cyber Insurance
So what do actuaries actually do in this sector? Plenty of hard stuff. One respondent to the IFoA survey described his recent work: “The severity module involved GLM (generalized linear model) modelling, calibrating the distribution mean and variance based on historically large observed losses. I also replicated the severity model logic in Python, allowing for a more granular understanding of the model and more efficient calibration. Finally, I helped create new technographic severity modifiers, which were used to modify the mean severity losses. These were meant to correlate with a company’s ability to mitigate losses once an attack has already started.”
Perhaps the best news for actuaries in the report is this: “More widely the potential capacity of the market exceeds current demand, and there will be ongoing opportunities for appropriately skilled actuaries to develop in this field.”
Find the report here.