ARO (Annualized Rate of Occurrence) is an analysis element that measures the frequency or likelihood of an event happening in a given year. ARO is often used in risk assessment and management, as it helps to estimate the potential loss or impact of an event. A company can use ARO to calculate the annualized loss expectancy (ALE) of an event, which is the product of ARO and the single loss expectancy (SLE). ALE represents the expected cost of an event per year, and can be used to compare with the cost of implementing a security control or purchasing an insurance policy.
The company most likely used ARO in making the decision to remove the coverage for ransomware attacks from its cyber insurance policy. The company may have estimated the ARO of ransomware attacks based on historical data, industry trends, or threat intelligence, and found that the ARO was low or negligible. The company may have also calculated the ALE of ransomware attacks, and found that the ALE was lower than the cost of the insurance policy. Therefore, the company decided to reduce the cost of its annual cyber insurance policy by removing the coverage for ransomware attacks, as it deemed the risk to be acceptable or manageable.
IMTTR (Incident Management Team Training and Readiness), RTO (Recovery Time Objective), and MTBF (Mean Time Between Failures) are not analysis elements that the company most likely used in making the decision to remove the coverage for ransomware attacks from its cyber insurance policy. IMTTR is a process of preparing and training the incident management team to respond effectively to security incidents. IMTTR does not measure the frequency or impact of an event, but rather the capability and readiness of the team. RTO is a metric that defines the maximum acceptable time for restoring a system or service after a disruption. RTO does not measure the frequency or impact of an event, but rather the availability and continuity of the system or service. MTBF is a metric that measures the average time between failures of a system or component. MTBF does not measure the frequency or impact of an event, but rather the reliability and performance of the system or component.
References = CompTIA Security+ SY0-701 Certification Study Guide, page 97-98; Professor Messer’s CompTIA SY0-701 Security+ Training Course, video 5.2 - Risk Management, 0:00 - 3:00.
