Cyber catastrophe bond news

2025 is shaping to be another strong year for catastrophe bond and insurance-linked securities (ILS) issuance following record growth seen across the market last year, despite the fallout from the Los Angeles wildfires in January, says global ratings agency AM Best.

The growing demand for cyber insurance is driving increased interest in the cyber insurance-linked securities (ILS) market, with cyber catastrophe bonds emerging as a key tool for risk mitigation, according to a new report from S&P Global Ratings.

Reinsurance broker Gallagher Re recently launched its Cyber Risk Adjusted Rating (RAR) Index, revealing that its value was 100% higher on January 1st, 2025, compared to January 1st 2020, indicating higher rates-on-line, as the cyber market continues to grow amid an evolving risk landscape.

Speaking earlier today during Beazley’s earnings call for its Q4’24 results, Chief Executive Officer (CEO), Adrian Cox, revealed that the London headquartered specialty insurance and reinsurance underwriter, plans to sponsor more cyber catastrophe bonds in 2025 as it continues to grow.

Speaking in a recent video interview with our sister publication Reinsurance News, James Vickers, Chairman of Gallagher Re’s International division, suggested that the excess capacity coming into the insurance-linked securities (ILS) space will help to drive innovation and support the development of new lines of business.

Fitch Ratings, a provider of credit ratings, research, and risk analysis, expects to see a further expansion of alternative reinsurance capacity in 2025, supported by cyber catastrophe bond issuances, which will add to the reinsurance sector’s capital base and help absorb earnings volatility.

Since their introduction to the market in 2023, there’s now been 10 cyber cat bonds, and CyberCube, the cyber risk analytics provider, expects their coverage, along with cyber insurance-linked securities (ILS) solutions to narrow and become more targeted going forward.

Investment manager Man Group’s outlook for the catastrophe bond and related insurance-linked securities (ILS) market remains positive as the industry begins 2025, despite there being some distortion seen in industry index deals following strong investor interest.

According to broking group Howden, inflows are accelerating in ILS arrangements for casualty, managing general agents (MGAs), cyber insurance-linked securities (cyber ILS) and reinsurance sidecars, as capacity providers look to grow existing premium pools.

Lockton Re, the reinsurance arm of the independent broking group, has now confirmed the role former Gallagher Re executive Theo Norris has taken at the firm, appointing him UK Capital Markets Structuring and Cyber ILS Leader.