Joy Agwunobi
CyberCube, a leading provider of cyber risk analytics for the insurance sector, has released new research showing that diversification and mitigation measures can lower insurers’ exposure to catastrophic cyber events.
The study, titled “Reducing Cyber Catastrophe Risk: Diversification and Mitigation in Action,” draws on analysis from the company’s latest catastrophe model, Portfolio Manager v6 (PM v6). Findings indicate that spreading exposures across geography, industry, revenue, and technology can reduce potential cyber losses by as much as 42 percent.
Beyond diversification, the report stresses the importance of strong cyber hygiene. Enterprises with effective patch management, network segmentation, and robust backup protocols could cut modeled tail losses by up to 57 percent across different types of cyber perils, with even greater benefits in scenarios involving widespread ransomware attacks.
Despite the benefits, CyberCube noted that insured cyber risk remains heavily concentrated in the United States, which currently accounts for nearly two-thirds of the global cyber insurance market. Many of the most severe tail-risk scenarios are linked to U.S.-based technologies, including major cloud service providers and operating system vendors, creating Single Points of Failure (SPoFs) that drive systemic risk.
However, the report projects that this concentration will gradually ease as insurance markets in Europe and Asia grow at a faster pace than the U.S. over the coming years, helping to balance exposures more evenly across regions, industries, and company sizes.
The updated version of Portfolio Manager, released in July 2025, incorporates insights from internal and external cyber experts on strategies that can better prepare organisations for catastrophic cyber events.
Commenting on the findings, Jon Laux, CyberCube’s vice president of Analytics, said the rapid expansion of the cyber insurance market has transformed it into a catastrophe-exposed, capital-intensive line of business.
“The cyber insurance market has experienced rapid and sustained growth over the past several years, emerging as a catastrophe (CAT)–exposed and capital-intensive line of business.This trajectory, while promising, heightens the need to understand the role of diversification and risk mitigation—two themes that have been extensively examined in natural catastrophe insurance, but remain comparatively underexplored in cyber,” Laux stated.
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