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Cyber ​​report calls for improvements in risk modeling: S&P



Improvements in risk modeling are necessary if future cyber insurance growth is to reflect increased market capacity driven by industry appetite rather than higher prices stemming from a mismatch between supply and demand, a credit rating agency report published Tuesday said.

S&P Global Ratings predicts in its report that cyber insurance premiums of $9 billion in 2021 reported by Munich Re are likely to grow by an average of 25% annually to around $22.5 billion in 2025, saying it is the fastest growing sub-segment of insurance to market.

But “A growing number of (re)insurers are hesitant to underwrite large risks, and some have reduced their risk appetite, due to the increased frequency and severity of cyber-attacks and greater systemic vulnerabilities,”

; the report said.

“We expect that the path to improved cyber insurance coverage will be diagnosed with clear and precise wording that mitigates changing risks,” it said.

“The major challenge for (re)insurers to develop this formulation lies in the need for continuous reassessment of shifting risk exposures, which requires dynamic contract terms and coverage concepts – both of which are likely to be enduring features of the cyber industry,” according to the report.


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