Risk management is gaining importance and recognition within non-financial firms. Comprehensive risk management at the enterprise level is no longer limited to financial institutions. Among the many enterprise risks, cyber risk has been rapidly growing in importance.

Analysis of cyber risk is particularly important within the enterprise risk management framework (ERM), which enables identification of tradeoffs and making informed decisions. The adoption of the ERM approach by non-financial firms is growing. This approach, when properly implemented, also facilitates decisions that involve cyber risk insurance. Threats, vulnerabilities and potential consequences of cybersecurity breaches and failures differ by industry and company. However, the ability to use the same general analytical framework in cyber risk analysis and ERM explains Navigation Advisorsí concentration on:

  • Advanced tools for analyzing cyber risk, quantifying cyber risk exposure, and expressing risk exposure in terms of probability distributions of potential financial losses
  • Corporate risk governance and its impact on cyber risk exposure
  • Quantification, in dollar terms, of individual components of potential losses from data breaches and other cyber events
  • Threat intelligence, advanced persistent threats and insider threat analysis
  • Cyber insurance/reinsurance pricing approaches that are data-driven and significantly more risk-sensitive than the methodologies currently used by most of the industry

For some non-financial firms, cyber risk is not only a component of operational risk but an important strategic risk that requires even more careful analysis.

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