SecondSight enters cyber insurance market with AI-driven platform for ‘inside-out’ underwriting

by | Oct 12, 2022 | Technology

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The cyber insurance market is still in its infancy — and, many say, first-generation solutions are being constrained by tech debt and legacy thinking. 

While ransomware and other cyberattacks continue to rise in both frequency and cost, many organizations are underinsured or uninsured altogether against cyberthreats. Not for lack of trying; as underwriting evolves and becomes more complex, technical and time-consuming, many applications are simply denied. 

This all requires a whole new approach to risk assessment: Underwriters need mechanisms to measure the true digital risk that “lives within an organization,” said Reuben Vandeventer, CEO of Indiana-based startup SecondSight.

His company aims to provide this: The company today emerged from stealth with $3 million in seed funding, offering what it calls the industry’s first artificial intelligence (AI)-driven platform for “inside-out” underwriting. 

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“SecondSight recognizes that cybersecurity and true digital risk are really about assets and liabilities,” said Vandeventer. “Digital risk is only meaningful and actionable for business stakeholders when it’s connected to the bottom line.”

Cyber insurance = A hard market

According to a 2021 report from the National Association of Insurance Commissioners (NAIC), the cybersecurity insurance market — including both U.S. domiciled insurers and alien surplus lines insurers writing business in the U.S. — was worth roughly $4.1 billion in direct written premiums in 2020. This reflects a 29.1% jump from the prior year.

Meanwhile, insurers writing standalone cyber insurance products reported approximately $2.58 billion in direct written premiums. Those writing cybersecurity insurance as part of a package policy reported roughly $1.49 billion in direct written premiums.

And, the market is prime for even more growth: According to Markets and Markets, the cyber insurance market size will grow from an estimated $11.9 billion in 2022 to $29.2 billion by 2027, registering a compound annual growth rate (CAGR) of nearly 20%. 

The main drivers, according to the firm, are the “rapid surge” of cybersecurity incidents coupled with an increase …

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