Cyber ILS – Cyber Insurance-Linked Securities news

The insurance-linked securities (ILS) market is continuing to evolve beyond traditional catastrophe bonds, with growing issuance in cyber and parametric segments, reflecting efforts to close protection gaps and provide alternative risk transfer solutions, according to a new report from AM Best.

Analysis from reinsurance broker Howden Re suggests that a cyber catastrophe industry loss event of $9 billion or more would result in more meaningful losses to the outstanding cyber cat bond market, and that cat bond may outperform on a recovery basis for cedents.

One of the prerequisites for a growing cyber insurance and reinsurance market is that availability of retrocession must increase, with the capital markets at scale needed to support event-based retrocession covers, according to broker Howden Re.

As the cyber insurance-linked securities (ILS) market continues to expand, analysts at S&P Global Ratings have identified key factors influencing cyber ILS credit quality, including regulatory risks, policy terms, cedent risk, asset collateral, and modelling challenges.

At the 2025 Artemis insurance-linked securities (ILS) conference in New York City, Richard Gray, Head of Third-Party Capital at specialist insurer Beazley, spoke with AM Best about the rapid growth and potential of cyber catastrophe bonds.

Global reinsurance firm Hannover Re has successfully sponsored a renewal of its landmark parametric cloud outage catastrophe bond, securing $20 million in retrocessional cyber reinsurance protection covering cloud outage events from a new Cumulus Re (Series 2025-1) issuance, with the support of Parametrix.

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.

According to Gallagher Securities, the specialist insurance-linked securities (ILS) and investment banking arm of reinsurance broker Gallagher Re, the future of the cyber ILS market is not a question of growth, but rather how quickly the market can evolve to meet evolving opportunities and challenges.