Cyber catastrophe bond news

Cyber risk modelling specialist CyberCube has launched a set of exposure databases for cyber risk, claiming them as the first of their kind, something seen as a key pre-requisite for broader cyber insurance-linked securities (ILS) activity.

Fermat Capital Management, one of the largest specialist investment managers of catastrophe bonds and insurance-linked securities (ILS), has invested in cyber insurtech start-up Elpha Secure Technology, participating in its $20 million Series A.

Envelop Risk, a cyber underwriting company with a data-driven approach, has announced the launch of a Capital Markets unit, as it looks to partner with insurance-linked securities (ILS) funds alongside its own reinsurance vehicle.

Speaking in Monte Carlo today, senior executives of Swiss Re discussed the cyber reinsurance market and said while they are cautious and currently don’t see it suiting the capital markets appetite right now, they are working on ways to develop cyber risk transfer options that could be transferred to ILS investors.

The first more public cyber insurance-linked securities (ILS), or cyber catastrophe bond deal cannot be far away, panellists concluded at an ILS roundtable hosted by global reinsurance firm Munich Re in Monte Carlo this morning.

Many insurance-linked securities (ILS) investors remain hesitant about allocating capital to cyber insurance and reinsurance risks, which leads rating agency S&P Global to suggest growth of a cyber ILS market will likely be slow in the short to medium term.

So long as deal economics are favourable and supported by a material sample of risk data, there’s an opportunity to pilot cyber insurance-linked securities (ILS) solutions, according to specialist provider of software for cyber risk quantification for large industrial and critical infrastructure corporates, DeNexus.

The increased digitalisation and interconnectedness of the world has altered the risk profile of portfolios, meaning that insurance-linked securities (ILS) funds are already holding cyber risk, they’re just not getting paid for the exposure, according to DeNexus, a specialist provider of software for cyber risk quantification for large industrial and critical infrastructure corporates.

The United States Department of Treasury’s Federal Insurance Office (FIO) is seeking industry input and feedback on how available reinsurance and retrocession support from the capital markets may be for terrorism related risks.

Cyber risk is often touted as a potential area of participation for the insurance-linked securities (ILS) space, but owing to its nature, it might be wise to adopt a more bespoke approach to begin with, according to Brittany Baker, Director of Technical Sales at CyberCube.