Cyber risk modeling for private equity

CyberCube helps private equity firms and their brokers answer this by modeling a portfolio company's potential cyber losses, from an average year to a severe one, and benchmarking its limits and retentions against genuine peers, so the firm can see whether the cover it buys is proportionate to the company's actual exposure. The answer depends on the company's own loss profile and the firm's appetite for uninsured loss, advised by the broker.

Cyber risk quantification for private equity expresses the cyber risk of portfolio companies and acquisition targets in financial terms, and CyberCube's version is built on the same cyber catastrophe and loss models that most leading cyber brokers, insurers and reinsurers already use to price and manage cyber risk. That means outputs come in the terms insurance is bought in (limits, retentions, Average Annual Loss and total cost of risk) and carry weight in the broker and underwriter conversation.

CyberCube quantifies cyber risk across a private equity portfolio by modeling every portfolio company's economic, insured and uninsured losses and providing the losses expected in an average year to unlikely but extreme years. Firms use the results to decide where to raise limits, adjust retentions or consider a portfolio-wide program.

Cyber aggregation risk is the chance that one event, such as an outage at a cloud, software or healthcare records provider that several portfolio companies rely on, hits many of them at once. CyberCube models that technology concentration so private equity firms can see what such an event would cost the fund and how much is insured.

CyberCube's analytics are used by the majority of the cyber insurance industry by premium, including 85% of the top global cyber brokers. This creates a rich data feedback loop to help organizations benchmark their cyber insurance coverage against limits.

CyberCube gives private equity deal teams a fast, outside-in view of an acquisition target's cyber exposure, expressed in insurance terms rather than technical findings, using little more than the company's name and its proposed insurance terms, so the firm can inform limits at close and identify which targets warrant deeper forensic diligence before the deal closes.

Security ratings score how well a company appears to be protected, while CyberCube's cyber loss modeling estimates what a cyber event would cost a portfolio company or the whole fund in dollars and how much of that loss is insured. The two answer different questions, so many firms use ratings alongside CyberCube rather than instead of it.

Yes: CyberCube does not sell insurance, so its analysis gives private equity firms a carrier-independent view of cyber risk that is not bundled with any insurer's coverage and can be taken to any broker or market, while still being built on the models that brokers, insurers and reinsurers already trust. We can deliver through your broker or work with you directly.

CyberCube treats private equity firm and portfolio company information as confidential, works within the confidentiality and data terms each firm requires, and can run engagements with a firm's legal counsel involved where privilege is needed, so sensitive deal and portfolio information stays protected throughout the engagement, from a single-company proof of concept to a full portfolio readout.