A system and method are presented for forecasting the risk of cyber-attacks on targeted networks. The described technology quantifies linear and non-linear damages to network-dependent assets by propagating probabilistic distributions of events in sequence and time in order to forecast damages over specified periods. Damage-forecasts are used to estimate probabilistically time-varying financial losses for cyber-attacks. The described technology incorporates quantities and dependencies for pricing insurance, re-insurance, and self-insurance, assessing cost-benefit tradeoffs for sequenced implementation of security control measures, and detecting attacks in the targeted network.