Munich Re, Gallagher Re and Bitsight are founding members of a steering group created by catastrophe risk modeller Moody’s RMS.  

The group has been established to counter issues holding back cyber insurance market growth. It will tackle constraints such as a lack of standardisation, and “confidence and insufficient comfort” across insurance boardrooms, investors and regulators community around cyber risk. 

Gallagher Re Global CEO Tom Wakefield says cyber represents a systemic risk, but also a “huge opportunity for our industry”.  

“Our biggest challenge is attracting enough capital to support clients’ growth in this area,” he said, adding the “sheer scale of future demand for risk transfer” would mean the market was likely to always be capital constrained. 

The steering group will “produce a powerful mechanism for advancing the wider industry’s view of cyber risk,” he said. 

Achieving a greater understanding of cyber risk will help provide the reassurance and confidence required to seize growth opportunities, the group says.  

Moody’s RMS will ramp up cyber analytics and look to develop a “unified currency” of cyber risk across underwriting, systemic aggregation, and risk management.  

“There are many legitimate concerns around risk, regulation, and the lack of standardisation,” Moody’s RMS GM Michael Steel said. "We are therefore committing to significantly increase our investment in cyber modelling … to help develop new markets for the industry’s growth. 

“There is a clear need and a significant opportunity to accelerate growth in the global cyber underwriting market.” 

Bitsight Chief Risk Officer Derek Vadala says strong partnerships are essential to managing cyber risk because it is a “complex, persistent, and asymmetric threat,” while Munich Re Chief Cyber Underwriter Jürgen Reinhart says it is vital cyber insurance growth be underpinned by reliable models to ensure further capacity.  

“Initiatives like these play a significant role in improving industry-wide understanding of cyber accumulation risk and underwriting quality, while also strengthening stakeholder confidence,” he said.