Cyber catastrophe bond news

The World Bank continues to explore ways it can expand the range of risks and perils that its member countries can hedge using risk transfer structures including catastrophe bonds.

A lack of historical and contextual data continues to hinder the entry of the insurance-linked securities (ILS) market into the cyber re/insurance space, and with ‘silent’ cyber exposures adding further uncertainty, it might be easiest for the ILS sector to focus on affirmative cyber, at least to begin with.

Given the enormous economic loss potential associated with cyber risks, rating agency Standard & Poor’s feels it inevitable that insurance and reinsurance firms will look to both the government and capital markets to help in boosting available cyber risk capacity.

Global insurance and reinsurance group Allianz has been testing out the securitisation of cyber risks and there transfer to capital markets investors, but the firms CFO explained recently not to expect an explosion of such activity, as it is “not priority number one.”

Reinsurance giant Munich Re aims to keep a 10% share of the growing global cyber marketplace and so far says that alternative sources of capital are not impinging on the cyber sector, with little competition seen from ILS market sources.

We’re delighted to have partnered with the Institute of Insurance Economics at the University of St. Gallen, Switzerland to promote and publish a survey on the transfer of cyber risks using insurance-linked securities (ILS).

Leading international insurance and reinsurance firm MS Amlin, part of the MS&AD group, is investing in cyber reinsurance MGA Envelop Risk.

Norsk Hydro has said today that its costs from the cyber attack by malware or ransomware are estimated at up to US $41 million just from the first week since the event occurred.

Norsk Hydro, one of the world’s largest aluminium manufacturing firms, was hit by a cyber attack recently, as malware or ransomware caused the company to shutter and reduce operations at a number of locations.

Cyber risks are a logical place for the use of insurance-linked securities (ILS) capital as there is a real need for capacity, according to Brian Duperreault, the CEO of insurance giant AIG.