Page 200 - Cyber Defense eMagazine Annual RSA Edition for 2024

in the event of a severe fire. Likewise, cyber underwriting models should embrace this time-proven
approach.

For the insured organizations, this means quarterly insights into how well their people, their processes
and their cyber defense technologies are able to fare against the most severe cyber threats. The granular
efficacy data collected allows them to fine-tune the performance of their teams and their technologies, as
well as perfect and know their net cyber risk exposures. They can then be rewarded with lower cyber
insurance premiums if they are doing a good job.

Insurers, in turn, gain a clearer view of the risk that they are actually insuring.

Cyber insurers who switch their underwriting models to ones based on proven efficacy, will better
understand the extent to which risk and tail event exposures can be contained without expanding
exclusions. This will speed their way to getting their cyber lines back into the business of pursuing
sustainable, profitable growth. This approach will also enable smaller companies, who are currently
priced out of having any cyber insurance at all, who deserve it, to (re)access coverage.

A win-win for both insurers and insured, efficacy-based underwriting paves the way for insurers to
meaningfully introduce lower premiums to properly deserving entities. In turn, businesses will be
incentivized to embed cybersecurity best practices at the core of their operations. No more disconnects
between paper reports claiming effectivity and severe cyberattacks proving the opposite. Both the
insureds and their insurers will have confidence in their ability to withstand such events beforehand, and
with better outcomes for all.

About the Author

James Gerber is the CFO of SimSpace. He brings over 30 years of
experience working with the leading providers of cutting-edge
cybersecurity in the industrial and transportation sectors. Prior to
joining SimSpace in 2007, James was the CFO of venture and private
equity-backed companies in the cybersecurity and education spaces,
serving as a leader in the governance of an SEC-regulated public
company traded on the New York Stock Exchange. During his time at
the Pension Benefit Guaranty Corporation, he oversaw risk
forecasting over most of the companies in the S&P 500, and he
managed an institutional investment portfolio with over $50 billion of
assets under management.

James Gerber has a Bachelor of Science degree in mechanical and aerospace engineering from
Princeton University, and an M.B.A. from the Harvard Business School. He began his career as an
electronics and communication systems engineer, and later founded the Automated Systems Division of
Morrison Knudsen.

James can be reached online on LinkedIn and and at our company website https://www.simspace.com/.

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