Moody’s RMS launches cyber insurance initiative
Moody’s RMS has revealed its Cyber Industry Steering Group, a collaborative initiative aimed at fostering the expansion of the global cyber insurance market.
Munich Re and Gallagher Re, and 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 excited to further expand its partnership with Moody’s RMS by joining other leaders in the insurance industry in helping manage this critical, exponential risk.”
Barriers preventing the cyber insurance sector from expansion include a lack of standardisation across various market functions and a lack of confidence among insurance boardrooms, investors, and regulatory bodies regarding cyber risk.
The members of the steering group all share an interest in growing the cyber insurance market.
They will aim to guide the group in creating a long-term strategy that enhances risk analytics transparency and reshapes the industry's perception of cyber risk, with the hope of providing assurance and confidence for the industry to seize growth prospects.
Jürgen Reinhart, chief cyber underwriter at Munich Re, echoed this saying, "Cyber insurance is a dynamically developing line of business, projected to grow rapidly in the coming years.
“It is vital that this growth be underpinned by reliable and widely accepted models, both to foster a sustainable market and to ensure further capacity," explained Reinhart.
In a parallel move, Moody’s RMS has disclosed increases in its investment in cyber risk analytics to help unlock the market's growth potential.
The enhanced investment in cyber analytics will aim to establish a standardised measure of cyber risks across underwriting, systemic aggregation, and risk management.
Michael Steel, general manager at Moody’s RMS said: "There is a clear need and a significant opportunity to accelerate growth in the global cyber underwriting market.
“However, there are many legitimate concerns around risk, regulation, and the lack of standardisation. We are committing to increasing our investment in cyber modelling, as we see this effort as central to our role in helping develop new markets for the industry's growth," he added.
Tom Wakefield, global CEO of Gallagher Re, said "In a market likely to always be capital-constrained due to the sheer scale of future demand for risk transfer, our biggest challenge is attracting enough capital to support clients’ growth in this area."