Cyber ILS – Cyber Insurance-Linked Securities news

The successful second cyber catastrophe bond sponsored by Beazley, the $160 million PoleStar Re Ltd. (Series 2024-2) issuance that we reported on last Friday, is testament to the replicable 144A structure that has been created, according to Theo Norris, Head of Cyber ILS at Gallagher Securities.

Beazley has successfully sponsored a second 144A cyber catastrophe bond, securing a further $160 million in cyber reinsurance from a PoleStar Re Ltd. (Series 2024-2) issuance, which takes its total cyber cat bond cover to $300 million, Artemis has learned.

With the cyber insurance market size projected to increase in the near future, members of the Neuberger Berman ILS team have said that insurance-linked securities (ILS) will “likely play a crucial role” in providing additional capital to support said growth.

Property Claim Services (PCS), the provider of industry loss estimates and loss data globally and a unit of Verisk, has designated two cyber attacks as PCS Cyber Catastrophe Loss Events, meaning they are each expected to result in more than US $250 million of industry insured losses, Artemis has learned.

CatX, a digital catastrophe and parametric risk exchange start-up, is integrating risk analytics from CyberCube’s Portfolio Manager product into its offering, to bring cyber risk modelling capabilities to users of its platform.

The occurrence of a major cyber catastrophe loss event, while likely to lock-up most of the insurance-linked securities (ILS) capacity already deployed in the sector today, can also provide an opportunity to investors, as it should support understanding and belief in risk models while providing a higher-yielding opportunity, broker Lockton Re has suggested.

Amid high demand for capacity in the primary and reinsurance markets, analysis by Solidum Partners suggests the cyber cat bond segment will continue to grow in importance in the future and that market dynamics “should ensure adequate risk compensation in the medium term”.

Parametrix, a specialist in cloud downtime insurance protection, has launched Parametrix Analytics, a new service allowing re/insurers to quantify, manage, and transfer cloud risks with “unprecedented” accuracy.

The arrival of the world’s first cloud outage catastrophe bond was viewed very positively, and provides investors with a new avenue into the cyber insurance-linked securities (ILS) space, according to Henning Ludolphs, Managing Director Retrocession and Capital Markets at Hannover Re.

Global reinsurance firm Hannover Re has successfully sponsored a $13.75 million Cumulus Re (Series 2024-1) parametric cloud outage catastrophe bond that was privately issued and placed using the firm’s Kaith Re Ltd. vehicle, with modelling of the cyber risks undertaken by Parametrix.