Cyber catastrophe bond news

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.

The Finance Minister of Singapore has announced the launch of the world’s first commercial cyber risk pool, a facility for providing cyber insurance to corporate buyers in the Asia region that is expected to be backed by both insurance-linked securities (ILS) and reinsurance.

Global catastrophe risk modeller, AIR Worldwide, has announced the development of a new probabilistic cyber model that market participants state will reinforce their ability to develop and deliver innovative solutions such as cyber ILWs and insurance-linked securities (ILS) for cyber risk.

The enhancement of the PCS Global Cyber Index to include cyber catastrophe is in response to client demand, and is another positive step in helping the international risk transfer industry both understand and address the growing cyber threat.

Munich Re, the largest reinsurance company in the world, has said it would welcome capital markets support in providing capacity for cyber accumulations risks.

Property Claim Services (PCS) has expanded its industry loss index and estimates service for the cyber insurance and reinsurance space by adding cyber catastrophe events, covering losses that involve multiple insureds across affirmative and silent cyber with industry-wide insured losses of at least $250 million.

Envelop Risk, a recently launched start-up with a focus on cyber risk underwriting and analytics provision and which we expect will engage the capital markets to explore cyber insurance-linked securities (ILS), has announced the appointment of industry veteran and former XL Chairman and CEO Brian O’Hara to its board.

The insurance and reinsurance industry loss from the Petya / NotPetya cyber attack is escalating far beyond the level initially assumed possible, thanks to silent cyber exposure, demonstrating there is a need for a cyber dead cat trading market, according to Tom Johansmeyer, Co-Head, PCS Strategy & Development at ISO.

Before insurance-linked securities (ILS) move wholesale into the cyber risk underwriting arena the technologies and risk models used to quantify cyber exposures will need to mature further, but once that happens we should expect the provision of cyber reinsurance capital to come from diversified sources, according to PwC.

A new firm named Envelop Risk has launched to focus on cyber risk underwriting and analytics provision with experienced reinsurance capital markets executive Jonathan Spry at the helm, suggesting that the company may well look to cyber insurance-linked securities (ILS) in future.