98 Data and Models Lloyd’s Lab Impact Report 99 Quantifying physical damage “There is a concern that cyber risk can’t be A key factor for Axio was the brand value of Lloyd’s, priced with any level of confidence owing to a risks to improve the resilience of and the added legitimacy that it brings to any cyber insurance clients enterprise associated with the Lab. Participation has lack of usable data. But for many owners and led Axio to further discussions with the Lloyd’s Market operators of critical infrastructure, being able Cohort 10, 2023 Association, with insurers already involved in the cyber physical damage space or looking to dip a toe in the to articulate and find insurance cover for water, with brokers in London and the US looking to cyber-physical attacks is a top priority. By match this capacity with client appetite for coverage, and also with risk managers who are clamouring for a working with the insurance market through Understanding how cyber risk can translate into real-world issues is a cyber physical damage product. the Lloyd’s Lab, we're now in the process of challenge that the insurance industry and its clients have long wrestled Soon after completing the Lloyd’s Lab tenth cohort, turning our fully-working, proof of concept Axio was also named as a leading provider of cyber with. So when Axio’s cyber risk quanti昀椀cation SaaS platform was 昀椀rst risk quanti昀椀cation tools in the Forrester Wave Report model to a ‘go-to-market’ version". showcased in the 昀椀nal week of the Lloyd’s Lab tenth cohort, it introduced for Q3 2023. Peter Hawley - Vice President, Insurance, Axio Global, Inc. a unique solution to a pressing problem for thousands of insureds, from critical infrastructure owners to municipalities. Axio has deep insurance industry roots. Co-founder Scott Kannry was closely involved in developing the 昀椀rst commercial cyber insurance products while working at Aon, while co-founder David White was the security architect for the Cybersecurity Capability Maturity Model (C2M2 model) and has contributed to the development of many widely-used cybersecurity assessment frameworks. In the cyber physical damage version of the Axio360 platform, created in the Lloyd’s Lab, Axio takes the data submitted by clients as part of various insurance applications – for cyber, property, engineering risk etc – and runs it through various model scenarios before enriching it with further data as required by insurers or brokers. It then runs that output through a Monte Carlo simulation, producing realistic loss numbers, typically on a loss exceedance curve, which can then be broken down into separate physical damage and business interruption exposures. Building an ecosystem through the Lloyd’s Lab Many organisations exposed to physical damage from cyber-attacks 昀椀nd it di昀漀cult to articulate their true risk, and global insurance market capacity can be limited due to a lack of actionable exposure data. Participation in the Lloyd’s Lab was therefore a natural progression for Axio in helping to quantify cyber risk for its clients, and in assisting the Growing the cyber security property damage market insurance market with improving data quality and information 昀氀ow around physical damage exposures. Participating in the Lloyd’s Lab exceeded Axio’s expectations, with the highly positive reaction from the Axio’s engagement with around a dozen mentors in market to their proof of concept model now driving the the Lloyd’s Lab gave them the opportunity to talk development of a full cyber physical product that will directly to market practitioners – both underwriters soon be brought to market. and brokers – and to quickly build an ecosystem around the cyber physical damage proof of concept. The Lloyd’s Lab incubation of the Axio platform will also accelerate use of the updated Cyber Security Property Damage risk code, with the potential to grow capacity for these exposures from current gross written premium of around £200 million to a possible multi-billion dollar market. © Lloyd’s