Cyber Insurer’s Model Stress-Tests Firms for Worst-Case Attack

Coalition Inc., a cyber-insurance provider that tries to curb digital risk, has designed technology that simulates large-scale attacks to help insurers identify potential weaknesses in their portfolios and prevent widespread losses.

The San Francisco-based company’s model measures cyber risks in the event of cataclysmic losses, such as if all the world’s computers were shut down at once. The “Active Cyber Risk Model,” which the company plans to announce on Tuesday, would give insurers an overview of their potential losses as a way to better target sales of their policies.

“The insurance industry is overly simplistic in the ways it ...