ILS will return to the cyber conversation in time. AI risk a future factor: Baker, CyberCube

While broader insurance and reinsurance market dynamics mean we haven’t seen any 144A cyber catastrophe bonds in 2026 so far, there is no shortage of investor appetite for cyber insurance-linked securities (ILS), and industry-loss warranty (ILW) transactions are still being seen, according to Brittany Baker, VP of Solution Consulting, CyberCube.

Speaking with Artemis around the time of the Monte Carlo Reinsurance Rendez-vous event, Baker said that investor engagement on understanding cyber risk and readying themselves to invest in the cyber ILS asset class continues.

Baker of CyberCube explained why the cyber cat bond market has been quiet of late, highlighting the economics, “The soft market means traditional reinsurance capacity exists at lower prices, which decreases the general need to reach towards the ILS market for risk and capital management.

“On top of that, cyber balance sheets are not yet a significant driver in a lot of carrier or reinsurance companies’ overall risk, so time and resources get spent elsewhere first right now.”

She continued to say that investor interest is not a limiting factor, “That said, from what we can see there is more investor demand than sponsor supply, so that’s not holding back the market at this time.

“We’ve also seen a lot of investors spend the time to educate themselves since the first cycle of cat bonds, so there’s likely more building comfort and including it in mandates to be ready if and when more bonds come to market.”

The last 144A cyber catastrophe bonds to come to market were seen in December 2025, while the only cyber cat bond we’ve seen so far this year was a renewal of Hannover Re’s parametric cloud outage cat bond, Cumulus Re.

Find details of every cyber catastrophe bond by filtering our Deal Directory.

But cyber risk transfer and reinsurance does remain a priority in the corporate world and re/insurance market and with investor interest in this peril class still rising we are likely to see more over time.

“I think there will be increased supply of bonds for investors to consider in the near future, and we’re still seeing some ILWs come to market,” Baker explained.

Adding, “I also think those investors that stay keyed-in to developments in the threat landscape will be in the best position to move when those bonds come up.

“Whether it’s considering model updates, shifts in the threat landscape, or shifts in technology, staying relatively up to speed is a small lift that should pay off over time, since they don’t have to start from scratch during the next cycle.”

It’s largely a pricing issue at this time, Baker believes, telling us, “As pricing for ILS comes down and when the traditional market hardens, this will bring ILS more into the conversation as sponsors consider the risk transfer options available to them.”

CyberCube continues to work to educate investors on the risks associated with cyber insurance and on the opportunities that cyber ILS can present.

Baker said that, “CyberCube believes strongly in its responsibility to help investors understand the evolving cyber and technology risk landscape. Our education includes bi-annual Global Threat Briefings that cover the evolving risk landscape, and threat landscape updates also happen with each major model update, the next attritional loss (ALM) update is slated to happen towards the end of 2026 and cat model V7 is slated for mid-2027.

“CyberCube has particularly invested in AI research and thought leadership with client roundtables, white papers, and webinars, with our first major white paper slated to be released around RVS this year.”

Artificial intelligence is a hot topic for the company, as you’d expect, and CyberCube believes it could also be a driver of opportunity for the ILS market in time.

Baker stated, “AI development is an amplifier to the cyber threat landscape, and there are multiple ways developments could impact the insurance industry: impacts to frequency and severity trends on standalone cyber coverage in-force today, new single points of failure classes impacted by traditional cyber exposures, and new perils, not intended to be covered by standalone cyber coverage, that may be absorbed by it, fall into other lines of business, or warrant the creation of a new standalone AI line of business.”

Summing up by saying that, “New or shifting types of risk driven by AI will certainly bring opportunity to the ILS market, be it in increased capital needs, new accumulation paths, or new types of structures not considered today.”

Read all of our interviews with ILS market and reinsurance sector professionals here.