Cyber ILS – Cyber Insurance-Linked Securities news

According to a new report authored by Tom Johansmeyer, Global Head of Index Classes, at broker Price Forbes Re, several forms of reinsurance could help support longer-term cyber re/insurance market growth, however, new sources of capital will have to form, along with participation from the insurance-linked securities (ILS) market.

Further innovation in risk modelling and policy standardisation can help the cyber insurance and reinsurance community unlock more support from the capital markets through catastrophe bond and insurance-linked securities (ILS) markets, the Geneva Association has explained.

During the Geneva Association’s media call on Global Risks & Insurance, Darren Pain, Director of Cyber, highlighted his expectation for continued growth in the cyber insurance-linked securities (ILS) market, though he noted this growth is likely to be gradual due to ongoing challenges.

Aon’s Reinsurance Solutions division has announced the hiring of Robert O’Connell as Global Cyber Strategy and Growth Leader, Executive Managing Director, a role that will see him tasked with leading on delivering value to cyber clients, including through the use of cyber insurance-linked securities (ILS).

The emergence of an insurance-linked securities (ILS) market for cyber risk is seen as a critical component for the future expansion of that line of business, with the capital markets expected to be a key reinsurance and retrocession provider, Moody’s has said.

The global IT outage caused by a defective software update from CrowdStrike has highlighted the “persistent uncertainty” in the cyber catastrophe bond and insurance-linked securities (ILS) asset class, rating agency AM Best said, also highlighting that there is uncertainty surrounding the tail and potential for loss development, which it seems is misunderstood.

With Beazley reporting nine-month results today, CEO Adrian Cox explained during an analyst call that the company saw an opportunity this summer to bulk-up its cyber protection through industry-loss warranty (ILW) arrangements and PoleStar Re catastrophe bonds.

Welcome to Artemis’ 2024 Monte Carlo Rendezvous Executive Roundtable, in which nine expert speakers from across the insurance-linked securities (ILS) space discussed the sustainability of current market conditions and returns, investor sentiment, potential growth areas, and more.

While it has been growing its cyber underwriting business, specialist insurer Beazley has also implemented a robust hedging strategy to control the tail, recently securing a $290 million cyber industry loss warranty (ILW) cover and securing its third PoleStar Re cyber catastrophe bond.

Although Christian Bruns, Partner and Portfolio Manager at LGT ILS Partners Ltd., noted that transacting cyber risk in an excess-of-loss format may not currently be in the best interest of the firm’s investors, he highlighted the potential to transact the risk in a quota-share format through its in-house rated reinsurance carrier, Lumen Re.