Cyber Risk Modeling

When:Thu PM-3
OrganizersPhil Huggins, Ben Schofield
ParticipantsBen Schofield Ben Schofield , Chris Allen Chris Allen , Daniel Kefer Daniel Kefer , Dave Snowden Dave Snowden , Tony Richards Tony Richards
Remote ParticipantsSenen Garcia Senen Garcia


Phil brings his extensive experience to a discussion on modelling (general) risk and comparing security risk modelling maturity to other markets (finance, insurance, medical..). This also involves attribution of $ value to risk and how security teams can talk the language of the business


Current Security Risk Management is Broken

There is a lot of complexity and uncertainty in cyber risk. Current practice tends to hide uncertainty and present certainty.

We use Ordinal Scales (Red, Amber, Green / High, Medium, Low / 1,2,3,4,5 etc) rather than Cardinal measures (£ or %). Is a red x red risk a really red risk? Twice as bad? Three times as bad? We then assign numerical values to support ‘risk arithmetic’ (5 x 5 = 25 /2.5 = risk score) OWASP Risk Rating Methodology (Risk Factors / Ordinal Scales)

We then use risk matrices that arbitrarily identify an ordinal boundary as the ‘risk appetite’. (Amber =Good, red = Bad).

By assigning a single value to probability and impact we are communicating a level of certainty about the outcome we don’t really have.

People are individually poor at prediction Hedgehogs / Foxes / Superpredictors

We are awash with data about cyber events but few documented robust statistical methods deployed.

The solutions are well known by other risk professions

Quantitative Risk Approaches

Probability of event Range of outcomes (lognormal distribution) Monte Carlo Simulation Loss Exceedance Curves <- Business understands these FAIR / OpenFAIR

Prediction Approaches Risk Panels Averaged predictions Feedback !!!!!!!!! Brier Scores Base Rate Data Calibration

References: Dan Geer Doug Hubbard Philip Tetlock Jack Jones Ryan Huber




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