The Challenge
A U.S. bank managing $780 million in held assets discovered serious vulnerabilities in its cyber defense. A framework audit revealed that the institution lacked adequate protection against Distributed Denial of Service (DDoS) attacks, leaving critical operations exposed. While the necessary solution carried an annual price tag of $163,000, the bank lacked a sustainable financial mechanism to fund it. Traditional insurance policies offered little relief—coverage was limited, premiums were high, and there was no guarantee that insurers would support actual cyber remediation efforts.
The Approach
SeCAP combined a sponsored captive insurance solution with a technical risk strategy, transforming the company’s insurance spend into both a financial engine and a framework for strengthening defenses.
- Conducted a framework audit aligned with NIST CSF 2.0 to identify unaddressed risks.
- Prioritized implementation of enterprise-level DDoS protection to safeguard banking operations.
INSURANCE STRATEGY
- Structured a captive insurance company tailored to the bank’s unique operational and cyber risk profile.
- SeCAP funded setup costs (fiduciary, regulatory, and governance) to reduce the upfront burden.
- Developed surplus strategies so premiums accumulated within the captive could be redirected toward specific cyber investments like DDoS defenses.
- Provided fiduciary oversight (actuarial, underwriting, and legal) to ensure compliance and efficiency.
The Response
With the captive in place, the bank:
- Established a sponsored captive structure under SeCAP’s model, creating a sustainable financial framework.
- Generated sufficient surplus to fully fund the $163K annual DDoS protection contract.
- Strengthened its cyber posture through proactive, internally funded risk management instead of restrictive external insurers.
- Gave the board direct oversight of policy language and disbursements, aligning coverage with operational priorities.
- Improved regulatory compliance and reinforced stakeholder confidence by demonstrating proactive cyber resilience.
Audit Finding Report – Excerpt
- Institution: Regional Bank – $780M Held Assets
- Audit Performed: NIST Cybersecurity Framework (CSF 2.0) Gap Assessment
- Finding #004 – Inadequate Protection Against DDoS Attacks
- Framework Reference: PR.PT-3 (Protective Technology), DE.CM-1 (Detection Processes).
- Observation: The Bank lacked a dedicated DDoS mitigation solution; firewalls and IDS/IPS were insufficient to withstand volumetric attacks.
- Impact: High likelihood of successful DDoS leading to downtime, reputational damage, and financial loss.
- Risk Rating: High (likelihood = high, impact = severe).
- Recommendation: Engage an enterprise-grade DDoS mitigation service, integrate into IRP, and fund via captive surplus.
- Management Response: Bank agreed; SeCAP captive deployed to sustainably fund $163k annual contract.
Results & Takeaways
- Uncovered Hidden Risks – Framework audit revealed critical vulnerabilities that were not previously identified.
- Financial Independence – Captive surpluses funded essential DDoS protection sustainably.
- Operational Continuity – Protection ensured uninterrupted banking services and customer confidence.
- Reputation Safeguard – Proactive investment in cyber resilience reinforced trust with clients and regulators.
- Strategic Flexibility – Captive structure provided long-term adaptability to address future cyber threats without relying on costly external insurers.
In summary, SeCAP converted unmanaged vulnerabilities and rising insurance costs into a strategic advantage—uncovering hidden risks, funding essential DDoS protection through captive surpluses, safeguarding operations and reputation, and giving the bank long-term flexibility to address future threats with financial independence.