cyber ILW

Property Claim Services (PCS) has expanded its industry loss index and estimates service for the cyber insurance and reinsurance space by adding cyber catastrophe events, covering losses that involve multiple insureds across affirmative and silent cyber with industry-wide insured losses of at least $250 million.

Envelop Risk, a recently launched start-up with a focus on cyber risk underwriting and analytics provision and which we expect will engage the capital markets to explore cyber insurance-linked securities (ILS), has announced the appointment of industry veteran and former XL Chairman and CEO Brian O’Hara to its board.

The insurance and reinsurance industry loss from the Petya / NotPetya cyber attack is escalating far beyond the level initially assumed possible, thanks to silent cyber exposure, demonstrating there is a need for a cyber dead cat trading market, according to Tom Johansmeyer, Co-Head, PCS Strategy & Development at ISO.

Before insurance-linked securities (ILS) move wholesale into the cyber risk underwriting arena the technologies and risk models used to quantify cyber exposures will need to mature further, but once that happens we should expect the provision of cyber reinsurance capital to come from diversified sources, according to PwC.

A new firm named Envelop Risk has launched to focus on cyber risk underwriting and analytics provision with experienced reinsurance capital markets executive Jonathan Spry at the helm, suggesting that the company may well look to cyber insurance-linked securities (ILS) in future.

A recent cyber hack attack on U.S. retailer Hudson’s Bay, owner of the Saks and Lord & Taylor store brands, is expected to cause a loss to insurance and perhaps reinsurance interests and as a result Property Claim Services (PCS) has designated the event and will produce an estimate of insured losses for it.

The reinsurance and ILS market places itself at risk of arbitration by their use of ambiguous and unreliable industry loss trigger data sources, which can be as random and varied as “any credible source”, according to Property Claim Services (PCS), a Verisk Analytics business.

There remains a relative dearth of cyber risk models for insurance and reinsurance markets to use, compared to the availability of risk modelling tools and analytics for other lines of business. So when a new company launches dedicated to cyber risk and with the backing of tech giant Symantec Corporation it’s worth a closer look.

Hiscox Re & ILS, the reinsurance and third-party capital management unit of global re/insurer Hiscox, has announced that it is to offer a new cyber industry-loss warranty (ILW) product, which will provide aggregate limits based on the use of a PCS industry loss trigger for global cyber underwriting losses.

The use of an industry loss warranty (ILW) structure in inherently complex and rapidly advancing risks, such as cyber and terror, could support the repeatability of other structures and ultimately assist the innovative efforts of the insurance-linked securities (ILS) market, according to Property Claim Services (PCS), a Verisk Analytics business.