For years, "continuous monitoring" in cybersecurity lacked a clear definition, forcing improvised security practices. This paper introduces QUARC, a formal model that quantifies cybersecurity risk and links it to precise detection and response times. QUARC provides a robust, weight-free probabilistic risk function, translating this risk into concrete operational cadences using hazard and queue theories. This model offers a universal standard, allowing regulators to enforce testable compliance, security teams to monitor real-time conformance, and insurers to price risk accurately. QUARC transforms a vague policy into a measurable, enforceable reality, closing a critical loophole exploited by attackers.
This study analyzed six years of 10-K filings from 45 firms affected by ransomware, labeling 6,282 cybersecurity-related statements. Findings show disclosures increasingly focus on prospective risks and mitigation strategies, but fewer than half mention incident responses, revealing a lack of transparency. Firms often fail to connect potential risks to actual damages, highlighting limited awareness of ransomware threats.
A review of 28 studies (2019–2023) shows growing academic interest in the relationship between fintech and banking risk, using diverse models and frameworks. Research focuses on bank-level, country-level, and fintech-specific measures, analyzing risks like insolvency, credit, liquidity, and market risk. The study highlights the importance of interdisciplinary and cross-country research, recommends adopting multi-theoretical frameworks, and urges consideration of individual-level factors such as financial literacy and digital access. For policymakers, it offers guidance on monitoring fintech’s impact and stresses the need for comprehensive regulation and global cooperation to ensure financial stability and effective risk management.
This article presents modeling approaches—both structural and reduced-form—to improve the understanding and prediction of environmental risks. It enhances existing models for better risk assessment and pricing, particularly in infrastructure and land use contexts. Potential extensions include advanced temperature and rainfall modeling, such as stochastic mean-reversion and regime-switching Lévy processes. The paper also suggests future research comparing insurance pricing methods and exploring parametric insurance mechanisms, where payouts are triggered by measurable parameters rather than actual losses. These developments aim to refine environmental risk management and insurance strategies.
State-sponsored cyberattacks are a growing and serious threat to financial stability, particularly as geopolitical tensions rise. The financial sector and regulators must prioritize cyber resilience and coordinated defense strategies to mitigate systemic risk.
This EBA consultation proposes amendments to the Pillar 3 disclosures framework, integrating new requirements from Regulation (EU) 2024/1623 (CRR3) on ESG risks, equity exposures, and shadow banking entities. It aims to enhance transparency, streamline reporting, and simplify compliance.
Key changes include expanding ESG disclosure scope to more institutions with a proportionate approach, clarifying existing large institution disclosures, aligning with Taxonomy Regulation, and providing transitional provisions. The goal is to improve market discipline and ensure consistent, clear financial reporting across the EU banking sector.
This study emphasizes the need for clearer, consumer-friendly disclosures in home insurance policies regarding natural catastrophe coverage. Despite some insurers providing accurate information, vague language and inconsistent definitions in Insurance Product Information Documents (IPIDs) often confuse consumers about coverage for events like floods or fires. With only a quarter of natural disaster losses insured in Europe, unclear disclosures contribute to a significant protection gap, leaving households vulnerable. EIOPA suggests improved IPID design, including detailed peril taxonomies and clear exclusion terms, to help consumers make informed decisions.
Insurance Europe responded to EIOPA's draft Opinion on AI governance in insurance, supporting clarity on existing rules but raising concerns over potential new obligations. It cautioned that the draft's language might lead to supervisory expectations being misinterpreted as binding requirements, conflicting with the EU's simplification goals for smaller firms. Insurance Europe also highlighted risks of dual supervision in some regions and emphasized the need for clear distinctions between different AI types and user roles. It urged EIOPA to focus on aligning the Opinion with established frameworks like Solvency II and GDPR for effective oversight.
The UK regulator plans to simplify its insurance rulebook by removing outdated and duplicate requirements, aiming to reduce costs and increase market access while maintaining customer protection. Proposed changes include exempting large commercial clients from some conduct rules, reducing mandatory annual product reviews, allowing flexible lead insurer arrangements, broadening bespoke contract exclusions, and eliminating certain training requirements. These reforms aim to boost competitiveness while protecting smaller clients. The regulator seeks feedback on these proposals by July 2, 2025, as part of its ongoing effort to streamline regulations and support industry growth.
As extreme weather events intensify, insurers face limits in absorbing losses, necessitating a shift from post-event compensation to loss prevention. This requires interlinked public, public-private, and private solutions, with tough policy decisions on responsibilities and cost allocation. Insurers can leverage risk expertise, data, and technology to promote loss prevention through knowledge-sharing and financing household measures, fostering a cycle of enhanced insurability, reduced protection gaps, and business growth. While insurance law traditionally supports compensation, tailored loss prevention clauses could become standard, addressing protection gaps and creating transformative opportunities. Prevention surpasses post-event claims and uninsured losses.