Insurance has grown increasingly closer to cybersecurity over the past several years, evolving from a loosely estimated afterthought to an integral part of companies' responses to cyberattacks like ransomware. On Wednesday, a hot startup is furthering that trend by changing its name and mission to give enterprises both cybersecurity insurance and tech support from one source.
Resilience Insurance previously did business as Arceo.ai, which analyzed cybersecurity risks based on data analysis and matched customers with appropriate insurance plans from other companies. Now the 45-person, San Francisco startup will insure companies itself while also analyzing and addressing their cybersecurity needs.
CEO Vishaal "V8" Hariprasad likens the relaunched company to a health maintenance organization (HMO) like Kaiser or Anthem. Just as HMOs both insure patients and give them care, Resilience will both insure and protect companies. "We do both, which allows us to specify insurance to a company's needs."
Hariprasad, who previously founded Morta Security and sold it to Palo Alto Networks, says his reinvented company blends cybersecurity and insurance in a way that will significantly reduce companies' chances of being hit hard by cybercrime.
Why?
As both insurer and cybersecurity provider, Resilience is deeply invested in protecting its customers – and avoiding paying claims. "Resilience is reinventing cyber insurance by aligning our interests with those of the companies we insure," said the startup's president, Mario Vitale.
Pivoting from evaluating cyber risk for companies to providing both insurance and cybersecurity support gives Resilience a unique place in bridging two areas that have grown closer and closer, says investor Arif Janmohamed, a partner at Lightspeed Venture Partners. "They've been helping insurance companies for years, but starting today, as a security-driven insurance company, they're very well positioned in the industry to protect companies against cybercrime," Janmohamed says.
Last year Arceo.ai raised $37 million in a round led by Peter Thiel's Founders Fund and Lightspeed. Wednesday's re-launch extends that funding round a bit, and the company has now raised around $40 million, Janmohamed says. Although the company declined to share its valuation, CEO Hariprasad said it's in the low hundreds of millions.
Because the firm has been gradually bulking up its cybersecurity talent, it is not planning a hiring spree given this to providing client's protection.
Why cyber insurance has exploded
Insurance has been steadily growing into a more integral part of cybersecurity for years, experts say.
Tim Francis, the enterprise lead for cyber insurance at Travelers, says insurance in this area has changed dramatically because of the increase in attacks.
A few years ago, insurance carriers didn't typically closely audit medium-sized companies they were insuring against cyberattacks. Attacks were relatively rare, and a one-size-fits-all approach was often sufficient. Then ransomware – in which cybercriminals lock up companies' computer systems until they pay up – began hitting more and more companies. Suddenly cyber insurers' role expanded.
"Cyber insurance has evolved a lot in the past several years, much quicker than other types of insurance," Francis said.
Cyber insurers often advise ransomware victims, work with law enforcement, and sometimes pay the demanded ransom for their customers.
"More and more hackers are beginning to realize that companies have cyber insurance, and are even asking to be connected with victims' cyber insurers directly," says Joshua Motta, CEO of Coalition, a cyber insurance startup that focuses on small and mid-sized companies.
New tools are helping insurers to protect companies with disbursed remote workers, says Michael Ouliel, the CEO of BlackSwan Technologies, a company that uses artificial intelligence to analyze companies' data to determine, among other things, cybersecurity risk. "It is increasingly possible to predict and prevent these sorts of attacks," Ouliel says. "You can even estimate the cost of an attack in real-time."
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