Page 153 - Cyber Defense eMagazine August 2024

How AI Is Transforming Cyber Risk Quantification

By Jose Seara, Founder and CEO, DeNexus

Cyber risks differ from other more familiar risks in life, such as the dangers of a car crash for drivers, or
a natural disaster for homeowners. These are well-defined, measurable risks with associated costs that
insurers can estimate.

Yet despite the sophistication of modern IT cybersecurity protections, most large organizations still lack
substantial empirical data about the risks facing their industrial control systems (ICS) and operational
technology (OT) at utility plants, refineries, and factories. This shortcoming is due to the limited availability
of data about OT cyber incidents, and an inability to apply traditional actuarial methods to estimate the
potential financial consequences.

The lack of data at these facilities makes inherent uncertainty a key challenge for quantifying and
prioritizing cyber risk. To get a better handle on this problem, a new field has emerged called Cyber Risk
Quantification and Management, or CRQM, which relies on risk transfer practices. New CRQM platforms
benefit from the use of artificial intelligence and data-driven tools to better manage, mitigate, and
eventually transfer cyber risks to insurers.

Cyber Defense eMagazine – August 2024 Edition 153
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