Cyber ILS – Cyber Insurance-Linked Securities news

In a new report, insurance focused investment manager Conning raises a valid point, that a nascent cyber insurance-linked securities (ILS) market may be based on fragile investor confidence, so the occurrence of a major cyber catastrophe loss could deter them before the market even has a chance to mature.

The issuance of Beazley’s $45 million Cairney cyber catastrophe bond, and Hannover Re’s $100 million, Stone Ridge Asset Management-backed retrocession cyber quota share arrangement, “represent the potential for a broader reinsurance source for the risk,” according to Fitch Ratings.

Expansion of the insurance-linked securities (ILS) asset class into other lines of business such as cyber risks is not likely to be a case of a reallocation away from property, rather Artex Capital Solutions executives believe that incremental growth of non-cat ILS is to be expected.

Cyber reinsurance capacity needs to grow threefold by 2030 to support the cyber insurance segment in fulfilling its potential, and focus is needed to maintain momentum in making third-party capital a key component of the cyber market’s capital structure, broker Howden has said.

Global reinsurance broker Guy Carpenter has strengthened its cyber reinsurance team and as part of that promoted Zain Awan to the newly created role of International Cyber ILS Lead.

As the capital markets, insurance-linked securities (ILS) specialist managers and institutional investors get more familiar and comfortable with investing in cyber insurance risk, there is a chance we see a new breed of more tech-led investors emerge and become a core of the cyber ILS asset class, Gallagher Re believes.

Insurance-linked securities (ILS) capital is increasingly becoming attracted to and getting more comfortable with deploying to cover cyber insurance and reinsurance risks, according to broker Guy Carpenter.

Beazley, the London headquartered specialty insurance and reinsurance underwriter, has successfully sponsored its second cyber catastrophe bond, Artemis has learned from sources, with the firm topping up its debut cyber cat bond using a second segregated cell to add $20 million of fresh reinsurance cover, through a Cairney II issuance.

Speaking at a webinar hosted by cyber-focused MGA and Lloyd’s coverholder Parametrix recently, Henning Ludolphs, Managing Director at reinsurance firm Hannover Re, suggested that now is a good time for potential cyber insurance-linked securities (ILS) investors to “get a foot in the door”.

When it comes to underwriting cyber risks, capital, whether traditional insurance and reinsurance, or alternative from the insurance-linked securities (ILS) market, “has to be rewarded”, Matt Harrison from risk modelling and analytics specialist Moody’s RMS, told us in our latest Artemis Live interview.