Moody’s: Significant Expansion Of Cyber Insurance Is Credit Negative

Though the booming cyber insurance market has room to grow, Moody’s sees significant expansion as credit negative, the ratings agency said in a new report. Like terrorism insurance, cyber is high risk/return product that insurers and reinsurers do well to test cautiously. “One of the challenges in underwriting cyber risk is the complexity of estimating clients’ exposures and vulnerability,” said Alan Murray, Moody’s senior vice-president. “The primary constraints include lack of standardized, credible data on frequency and severity loss and the fact that the same loss could affect multiple insured clients.”