ISP diversity and other external indicators added insight beyond revenue, industry and country.
Cyber insurers could improve claims frequency prediction by using digital footprint data alongside traditional underwriting factors such as revenue, industry and country.
According to a Gallagher Re study, it examined whether externally observable data could give insurers a better view of an organisation’s digital exposure and help identify differences between companies that may appear similar based on traditional firmographic information.
Gallagher Re used external technographic observations from KYND to assess the relationship between an organisation’s digital footprint and cyber claim frequency.
The findings showed that digital footprint data had explanatory value and could provide insurers with an additional way to assess cyber risk.
Measures of external digital complexity, including Internet Service Provider (ISP) diversity and related indicators, provided additional insight beyond revenue, industry and country.
The study said organisations with similar traditional characteristics could have different digital footprints, making external digital data a potentially useful complementary tool for cyber underwriting and risk selection.
Gallagher Re said the findings suggest that understanding the size and nature of an organisation’s external digital presence could help insurers better differentiate risks and assess the likelihood of future cyber claims.