# Cyber Insurance Retention vs Premium Tradeoff Calculator

> Source: https://netray.co/tools/cyber-insurance-retention-tradeoff-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

See whether taking a higher retention for a lower premium saves money at your expected incident frequency and size.

## Category

compliance-legal

## Industry

Manufacturing

## Audience

- IT security lead
- CFO
- Risk manager

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Expected incidents per year

**Key:** freq

**Type:** number

**Default:** 0.4

**Min:** 0

**Step:** 0.05

**Unit:** per year

**Help:** Claim-sized events, not every phishing email.

#### Average loss per incident

**Key:** loss

**Type:** number

**Default:** 400000

**Min:** 0

**Step:** 10000

**Unit:** $

**Help:** Response, restoration, legal and lost production for a typical covered event.

#### Low retention option

**Key:** ret_low

**Type:** number

**Default:** 50000

**Min:** 0

**Step:** 5000

**Unit:** $

#### Annual premium at low retention

**Key:** prem_low

**Type:** number

**Default:** 62000

**Min:** 0

**Step:** 1000

**Unit:** $

#### High retention option

**Key:** ret_high

**Type:** number

**Default:** 250000

**Min:** 0

**Step:** 5000

**Unit:** $

#### Annual premium at high retention

**Key:** prem_high

**Type:** number

**Default:** 41000

**Min:** 0

**Step:** 1000

**Unit:** $

#### Policy limit

**Key:** limit

**Type:** number

**Default:** 3000000

**Min:** 0

**Step:** 100000

**Unit:** $

**Outputs:**

#### Retained loss per incident, low option

**Key:** oop_low

**Expr:** min(loss, ret_low) + max(loss - ret_low - limit, 0)

**Format:** currency

#### Retained loss per incident, high option

**Key:** oop_high

**Expr:** min(loss, ret_high) + max(loss - ret_high - limit, 0)

**Format:** currency

#### Expected annual cost, low retention

**Key:** total_low

**Expr:** prem_low + freq * oop_low

**Format:** currency

**Primary:** true

#### Expected annual cost, high retention

**Key:** total_high

**Expr:** prem_high + freq * oop_high

**Format:** currency

**Primary:** true

#### Annual saving from the high retention

**Key:** saving

**Expr:** total_low - total_high

**Format:** currency

#### Extra cash needed after one incident

**Key:** extra_cash

**Expr:** oop_high - oop_low

**Format:** currency

**Description:** Liquidity you must hold to take the higher retention.

**Chart:**

#### Expected annual cost vs average loss per incident

**Type:** line

**X:** loss

**From:** 50000

**To:** 2000000

**Steps:** 20

**Series:**

- total_low
- total_high

**Disclaimer:** Uses one average loss per incident. Real losses vary and policies have sublimits, waiting periods and exclusions. Review the actual policy with your broker.

## Content

**Intro:** Higher retentions cut premiums, but they move cash risk onto the plant. This calculator compares two quotes on expected annual cost so the choice rests on frequency and size of loss rather than on the premium line alone.

**Sections:**

#### How to use it

**Body:** Enter the two quotes you are weighing: the retention and annual premium for each. Then estimate how often a claim-sized incident occurs and the average cost when it does. The calculator adds the premium to the expected retained loss for each option and shows which is cheaper on average, plus the extra cash you would need on hand after an event with the higher retention.

**Bullets:**

- Use only incidents large enough to approach the retention.
- Check whether the retention applies per claim or in aggregate.
- Confirm that business interruption has a waiting period in hours, not a retention in dollars.

#### The math

**Body:** For each option, retained loss per incident is the smaller of the loss and the retention, plus any amount above the limit stacked on the retention. Expected annual cost is the premium plus incident frequency times retained loss. The saving is the difference. The chart sweeps average loss, which shows the break-even where the lower premium stops compensating for the larger retained share.

#### Reading the result

**Body:** At small average losses both policies leave you paying roughly the loss itself, so the cheaper premium wins. As losses approach and exceed the higher retention, the low-retention policy starts paying out more and the lines converge or cross. If your realistic loss sits well above both retentions, the premium difference is the whole story. If it sits near the lower retention, a high retention is mostly a premium discount for risk you were already carrying.

#### What the numbers leave out

**Body:** Insurers price in your controls. MFA on remote access, offline backups, EDR and tested incident response often change eligibility and price more than retention choices. Policy terms such as ransomware sublimits, war exclusions and coinsurance can matter more than the headline limit. Treat this as a decision aid and take the quotes to a qualified broker.

**Cta:** If you need to evidence your controls to underwriters, Netray can help document how your ERP and plant data stay protected inside your own environment.

**Faq:**

#### Is a higher retention always cheaper?

**Answer:** No. It is cheaper on average only if the premium saving exceeds the extra expected retained loss. If incidents are frequent or costly, the lower retention often wins, and a high retention also needs real cash available.

#### What incident frequency should I use?

**Answer:** Use your own history of claim-sized events and sector data from brokers. If you have had none, a range of 0.1 to 0.5 per year tests the decision without claiming false precision.

#### Does this handle sublimits?

**Answer:** Only the overall limit. Ransomware, social engineering and business interruption sublimits can lower real recovery well below the policy limit, so read the schedule and adjust the loss input accordingly.

#### Should I model several incidents a year?

**Answer:** You can raise frequency above one, but check whether the retention applies per event or annually in aggregate, because that changes the retained cost materially.

## Search terms

cyber insurance retention calculator, cyber insurance deductible vs premium, self insured retention cyber, cyber insurance quote comparison, cyber insurance manufacturing, retention tradeoff calculator, cyber policy limit retention analysis

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