Cyber Event Catalog Simulation for Catastrophic Risk Modeling
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Current modeling techniques fail to accurately predict the likelihood and impact of catastrophic cyber events on businesses, especially those affecting third-party software and services, due to their novel and unpredictable nature, leading to limited accuracy in risk assessment for both insurance and reinsurance companies as well as affected businesses.
Innovation Solution
A method and system for catastrophic event modeling that generates a cyber event catalog based on past events, simulates potential cyber events, and estimates potential damage by accounting for third-party service and technology providers, using data cleansing, simulation, and Monte Carlo simulations to provide enhanced accuracy and granularity in loss estimates.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If traditional modeling techniques are used, then the modeling process is simple, but the accuracy of predicting catastrophic cyber events is insufficient
Solution Approach 1:
The patent segments the modeling system into multiple components: event catalogs containing historical cyber events, hazard tables identifying vulnerable organizations, and simulation modules that model event propagation. This segmentation allows the system to handle complexity through modular organization while achieving accurate predictions by systematically analyzing each component's contribution to overall risk
Solution Approach 2:
The patent performs preliminary actions by pre-generating event catalogs from historical data and pre-identifying vulnerable organizations through hazard tables before actual risk assessment is needed. This preliminary preparation enables the simulation model to quickly and accurately assess catastrophic event risks without requiring complex real-time computations, thus improving measurement precision while managing system complexity
2Measurement precision
If deterministic modeling approach is used, then the modeling process is straightforward, but it treats all companies as the same and reduces accuracy
Solution Approach 1:
The patent applies local quality by creating hazard tables that identify specific vulnerabilities and exposure levels for each individual organization rather than applying uniform assumptions. Each company's hazard profile is customized based on its specific third-party dependencies, software vulnerabilities, and operational characteristics, enabling accurate differentiation of risk levels across diverse organizations
Solution Approach 2:
The patent utilizes parameter changes by varying key parameters such as vulnerability severity, exposure level, and propagation probability for each organization in the simulation. These parameters are adjusted based on company-specific data from hazard tables, allowing the model to capture individual differences in risk profiles while maintaining a structured simulation framework
3Measurement precision
If use-centered approach is used, then the approach is simple to implement, but it fails to account for varied degrees of exposure and geographical impacts
Solution Approach 1:
The patent adds another dimension by incorporating geographical location and organizational hierarchy into the risk modeling framework. The hazard tables include spatial information about organizations and their interconnections, allowing the simulation to model how cyber events propagate across different geographical regions and organizational levels, thereby capturing varied exposure and geographical impacts that simple use-centered approaches miss
Data Source
AI summary
A system and method for catastrophic event modeling are provided. The method includes generating a cyber event catalog based on a past cyber event, the cyber event catalog including a plurality of cyber events; and simulating a cyber event, of the plurality of cyber events included in the cyber event catalog, to predict whether an organization is affected by a simulated cyber event, wherein the organization is an organization selected from a hazard table.