cyber insurance-linked securities

Speaking with Artemis, Hannover Re senior executives Silke Sehm and Henning Ludolphs explained that tapping into the insurance-linked securities (ILS) market for cyber retrocessional reinsurance capacity is a priority and with a quota share already arranged, the next step is sponsoring the reinsurer’s first cyber catastrophe bond, details of the form were not revealed.

In a new report, global reinsurance broker Lockton Re makes the case for cyber insurance-linked securities (ILS), saying that “now is the time” as market conditions have reached the point where their potential can be fulfilled and cyber ILS is gathering momentum.

Managing general agent and Lloyd’s coverholder Parametrix, a specialist in cloud downtime insurance protection structured on a parametric basis, believes that catastrophic cloud outage events will become a new cyber insurance-linked securities (ILS) offering.

In an interview with Artemis, specialist provider of software for cyber risk quantification for large industrial and critical infrastructure corporates, DeNexus, argues that a more granular approach to assessing cyber risk is needed to remove some of the guess work, which in turn will make investors more comfortable allocating capital.

The development of a cyber insurance-linked securities (ILS) market is underway, but given the differences in how investors and portfolio managers can diversify within cyber risk, this will likely mean a “different distribution of capital,” is seen, Gallagher Re executives told Artemis.

As we move into 2023, the cyber insurance linked securities (ILS) market is expected to see real traction, as demand for capacity continues to outstrip supply, while data and models are improving, according to Brittany Baker, Vice President of Solution Consulting, CyberCube.

Stone Ridge Asset Management, the New York based asset manager an alternative risk premia focus, including reinsurance and insurance-linked securities (ILS), has provided US $100 million in capital to support an innovative retrocession cyber quota share arrangement for global reinsurance firm Hannover Re.

The just over $45 million of private cyber catastrophe bond notes issued, by the Artex SAC vehicle using its segregated account named Cairney on behalf of sponsor Beazley, have now been listed on the Bermuda Stock Exchange (BSX).

The cyber risk market is projected to triple in size over the next three to four years, and for that growth to be achieved, solutions like the first cyber insurance-linked securities (ILS) transaction will be vital, according to Paul Bantick, Global Head of Cyber Risks at Beazley.

Cyber risk analytics and quantification software specialist CyberCube has now confirmed that its Portfolio Manager risk model was used for the landmark first catastrophe bond deal sponsored by re/insurer Beazley.