Valuation Impact

5 automated security scanners

Cyber Insurance Premium Factors

Purpose: The Cyber Insurance Premium Factors Scanner is designed to analyze publicly available statements, such as those found on company websites under sections like “security,” “compliance,” and “privacy,” to identify factors that either reduce or increase cyber insurance premiums. This tool evaluates the security posture of an organization by examining mentions of internationally recognized standards (like ISO 27001, SOC 2), disclosures about a robust security program, and evidence of past security incidents.

What It Detects:

Security Certifications and Compliance: The scanner looks for mentions of internationally recognized security standards such as ISO 27001, SOC 2, NIST, FedRAMP, Hitrust, and PCI DSS. It also checks for claims of adherence to regulatory frameworks like GDPR or CCPA.
Security Program Maturity Indicators: This includes disclosures about the company’s security program, such as mention of a risk management framework, vulnerability management programs, penetration testing, red team exercises, and bug bounty programs.
Incident Response Capability: The scanner detects evidence of formal incident response plans, including mentions of breach notifications, forensic investigations, and involvement with third-party IR firms.
Breach History Analysis: It identifies public acknowledgments of past security incidents, such as data breaches or cyber attacks, which are correlated to higher risk and increased premiums.
Governance and Oversight Disclosures: The scanner evaluates statements regarding board-level oversight of cybersecurity matters.

Inputs Required:

domain (string): The primary domain name under analysis, e.g., “acme.com.”
company_name (string): The company name for which the security posture is being assessed, e.g., “Acme Corporation.”

Business Impact: The ability to secure favorable insurance terms based on public disclosures of a strong security posture can positively influence business valuation and operational resilience. Conversely, high premiums suggest underlying vulnerabilities that may be liabilities in financial assessments and risk management strategies.

Risk Levels:

Critical: If the scanner detects no positive factors despite multiple negative indicators or if there are clear breaches with significant impact, it is considered critical.
High: When numerous negative factors outweigh any positive disclosures, indicating a high likelihood of increased premiums due to security weaknesses.
Medium: When moderate evidence of negative factors and some positive indications coexist, suggesting potentially higher but still manageable insurance costs.
Low: If the scanner finds robust public indicators of favorable security practices without significant negative findings, it is considered low risk.
Info: Any findings that do not significantly impact the overall risk assessment but are informative about specific areas warranting attention.

Example Findings:

“Acme Corporation’s security page mentions ISO 27001 certification and a public bug bounty program, suggesting a robust security posture.”
“Despite no direct mention of an incident response plan, Acme Corp has had multiple data breaches in the past year, indicating significant risk.”

This structured approach helps stakeholders understand how publicly available information can influence cyber insurance premiums and guide efforts to improve security practices for better financial outcomes.

Breach Cost Analysis

Purpose: The Breach Cost Analysis Scanner is designed to analyze public-facing web properties in order to uncover and extract financial figures related to security incidents. This tool aims to quantify the direct costs of data breaches, including regulatory fines, legal settlements, and remediation expenses. By providing a transparent view of post-breach liabilities, organizations can better manage their risks and valuations.

What It Detects:

The scanner scans through known public paths for incident announcements, looking for keywords such as “data breach,” “security incident,” or “unauthorized access.”
It specifically targets financial figures associated with breaches by identifying keywords like “fine,” “penalty,” “settlement,” and “charge.”
Additionally, it extracts monetary values using regex patterns that can handle different currencies (USD, EUR, GBP) and multipliers for millions or billions.
The scanner also detects indirect cost indicators such as reputational damage, loss of customer trust, and brand impact through qualitative search terms.

Inputs Required:

domain (string): Primary domain to analyze (e.g., acme.com)
company_name (string): Company name for statement searching (e.g., “Acme Corporation”)

Business Impact: Quantifying the financial impact of security incidents is crucial as it directly influences an organization’s risk assessment and strategic decision-making. Understanding these costs helps in mitigating future risks more effectively and improving overall cybersecurity posture.

Risk Levels:

Critical: When significant financial costs are identified or when there are clear indications of substantial financial loss due to a breach, the risk is considered critical.
High: A high risk level is assigned when multiple specific financial cost entries related to security incidents are found or when qualitative indicators suggest substantial financial impact.
Medium: This severity applies when moderate levels of financial costs and indirect impacts are detected.
Low: Informational findings occur when no public financial analysis or qualitative impact statements related to breaches are discovered, indicating a lower risk profile.

Example Findings:

“Found $50 million charge related to the security incident accrued in our quarterly filing.”
“The company has reached a settlement agreement for the class action lawsuit, agreeing to pay $25 million.”
“Public statements reveal reputational damage and loss of customer trust as indicators of financial impact.”

Security Incident Market Response

Purpose: The Security Incident Market Response Scanner is designed to analyze the correlation between public disclosures of security incidents and a company’s stock market performance. This tool identifies incident dates and measures the short-term impact on stock price volatility and valuation relative to the broader market, providing insights into potential vulnerabilities and risks associated with such incidents.

What It Detects:

Incident Date Identification: The scanner can identify the date of public disclosures related to security incidents.
Stock Market Response Analysis: It assesses the immediate (5 trading days) and longer-term (30 trading days) market performance relative to a benchmark index, such as the S&P 500 (SPY).
Risk Assessment: Based on the deviation from the benchmark index, it determines if there is a significant negative market response, which could indicate vulnerabilities.

Inputs Required:

Domain: The website domain of the company under investigation.
Company Name: The legal name or trading name of the company.
Stock Ticker: The stock symbol used to trade shares of the company on a stock exchange.

Business Impact: This scanner is crucial for assessing the financial exposure and risk management strategies of companies in response to security incidents. Understanding how markets react to such disclosures can provide valuable insights into potential investor confidence, regulatory scrutiny, and operational resilience.

Risk Levels:

Critical: A critical risk level would be triggered by a significant underperformance of the stock relative to the benchmark index (e.g., more than -5% deviation within 5 trading days).
High: A high risk level is indicated by substantial underperformance, such as more than -2% deviation within 5 trading days or more than -5% deviation within 30 trading days.
Medium: Medium risk levels are set for moderate deviations that might warrant closer monitoring but do not reach the thresholds for critical or high risks.
Low: Low risk levels indicate no significant negative market response, suggesting minimal vulnerability to such incidents.
Info: Informational findings would be scenarios where the scanner detects irregularities in data collection or analysis processes that do not directly impact financial risk assessment.

If the README doesn’t specify exact risk levels, infer them based on the scanner’s purpose and impact:

Example Findings:

“The company experienced a negative market response post-incident, underperforming the S&P 500 by -7.06% in the immediate trading days following disclosure.”
“No significant adverse market reaction was observed after the disclosed security incident; performance remained stable relative to the benchmark index.”

Security Investment ROI

Purpose: The Security Investment ROI Scanner is designed to analyze public-facing financial reports, investor relations pages, and corporate governance documents to detect qualitative statements about cybersecurity investment, program maturity, and its alignment with business objectives. This tool assesses how an organization communicates the value and return on its security spending to investors.

What It Detects:

Investment Level Statements: The scanner tests for qualitative disclosures about security spending using keywords such as “investing in cybersecurity,” “security budget,” “strengthening our defenses,” “enhancing our security,” “security program.”
Program Maturity and Risk Reduction: It checks for statements indicating a mature, framework-aligned program with keywords like “mature security program,” “risk reduction,” “improved posture,” “NIST CSF,” “ISO 27001,” “risk management.”
Business Enabler Language: The scanner identifies language linking security investment to business goals using terms such as “secure digital transformation,” “enabling innovation securely,” “protecting customer trust,” and “business enabler.”
Security Efficiency and Optimization: It evaluates statements about optimizing security operations (a proxy for ROI) with keywords like “security automation,” “SOAR,” “optimizing security operations,” and “security efficiency.”

Inputs Required:

domain (string): Primary domain to analyze (e.g., acme.com)
company_name (string): Company name for statement searching (e.g., “Acme Corporation”)

Business Impact: Investors and analysts increasingly view cybersecurity not just as a cost but as a critical business enabler and risk-mitigator. The ability to articulate the strategic value of security investments can significantly influence investor perceptions, impacting valuation and confidence in the company’s management.

Risk Levels:

Critical: This severity level is typically assigned when there are no public statements regarding security investment, program maturity, or ROI, indicating a lack of financial transparency on cyber risk management.
High: Indicates high signaling levels if multiple positive statements about cybersecurity investments and strategies are detected in public documents.
Medium: Signals medium vulnerability when moderate numbers of such statements are found but still suggest some level of commitment to security.
Low: Assigned when there is minimal or no evidence of security investment, maturity, or alignment with business objectives.
Info: Used for informational findings that do not necessarily affect the risk assessment directly but provide context on the company’s stance towards cybersecurity investments.

Example Findings:

“The company consistently mentions ‘investing in cybersecurity’ and ‘enhancing our security posture’ throughout its annual reports, suggesting a proactive approach to managing cyber risks.”
“Despite being a mature player in the industry, Acme Corporation fails to mention any specific cybersecurity investments or strategic alignments in its recent investor presentations, which could be seen as a risk for stakeholders.”

Security Rating Valuation Delta

Purpose: The Security Rating Valuation Delta Scanner is designed to analyze public-facing web properties for any discussion or disclosure of third-party cybersecurity ratings. This analysis helps in understanding how a company publicly communicates its security posture as measured by external rating agencies, which is crucial for investors and insurers during valuation processes.

What It Detects:

Security Rating Agency Mentions: The scanner tests for the presence of leading security rating agency names and checks for specific keywords related to cybersecurity ratings.
Positive Rating Disclosures: It verifies qualitative or quantitative statements about a high rating, looking for phrases like “A-rated,” “high score,” and “leader in.”
Negative Rating Mentions: The scanner identifies any public acknowledgment or discussion of a poor or declining rating, which is less common but may be present in certain filings.
Contextual Analysis: It distinguishes between a company promoting its own high score versus a generic mention of the industry.

Inputs Required:

domain (string): The primary domain to analyze, such as acme.com.
company_name (string): The specific company name for which statements are being searched, e.g., “Acme Corporation.”

Business Impact: Third-party security ratings are increasingly used by investors and insurers to quantify a company’s cyber risk. A positive rating signal can enhance investor confidence and brand trust, potentially leading to valuation uplift. Conversely, negative mentions or discussions of poor ratings indicate potential risks that could lead to breaches and affect the company’s valuation negatively.

Risk Levels:

Critical: This severity level is not explicitly defined in the provided text but would typically be reserved for situations where there are significant vulnerabilities or threats directly impacting critical systems.
High: Describes conditions such as public acknowledgment of low security ratings, which could signal systemic weaknesses and potential breach risks.
Medium: Applies to improving ratings that might not yet indicate a mature program but suggest efforts in the right direction.
Low: Informational findings would be for cases where no significant discussion about third-party security ratings is found on the corporate website, indicating minimal impact on valuation or risk perception.
Info: Not explicitly mentioned in the provided text; inferred as low risk unless otherwise indicated by findings.

Example Findings:

“Acme Corporation has achieved a ‘leader’ status in the latest Bitsight security rating report, which is likely to boost investor confidence and potentially influence its valuation.”
“While there are no public discussions of negative ratings or risks noted on Acme Corporation’s website, ongoing improvements in their security posture should be monitored closely for any potential future impacts.”

Note: The risk levels are inferred based on the purpose and impact described in the README.