Moody’s RMS has unveiled its Cyber Industry Steering Group, a collaborative initiative to promote the expansion of the global cyber insurance market.
Munich Re and Gallagher Re, along with global cyber risk management leader Bitsight, have joined the steering group as founding members, with additional industry partners expected to follow.
Derek Vadala, Chief Risk Officer at Bitsight, said: “Bitsight is delighted to extend its partnership with Moody’s RMS by joining other leading insurance companies in helping to manage this critical, exponential risk.
Barriers to the expansion of the cyber insurance sector include a lack of standardisation across different market functions and a lack of confidence in cyber risk among insurance boardrooms, investors and regulators.
The members of the Steering Group all share a common interest in the growth of the cyber insurance market.
They will guide the group in developing a long-term strategy to improve the transparency of risk analysis and reshape the industry’s perception of cyber risk, in the hope of giving the industry the certainty and confidence to seize growth opportunities.
Jürgen Reinhart, Chief Cyber Underwriter at Munich Re, agreed: “Cyber insurance is a dynamically developing line of business that is expected to grow rapidly in the coming years.
“It is essential that this growth is underpinned by reliable and widely accepted models, both to promote a sustainable market and to ensure further capacity,” Reinhart explained.
In a parallel move, Moody’s RMS has announced increased investment in cyber risk analytics to help unlock the market’s growth potential.
The increased investment in cyber analytics is aimed at establishing a standardised measure of cyber risk for underwriting, systemic aggregation and risk management.
Michael Steel, managing director at Moody’s RMS, said: “There is a clear need and significant opportunity to accelerate the growth of the global cyber underwriting market.
“However, there are many legitimate concerns around risk, regulation and lack of standardisation. We are committed to increasing our investment in cyber modelling as we see this effort as central to our role in developing new markets for industry growth,” he added.
Tom Wakefield, Global CEO of Gallagher Re, said: “In a market that is likely to always be capital constrained due to the sheer scale of future demand for risk transfer, our biggest challenge is to attract sufficient capital to support our clients’ growth in this area.
