Cyber insurance-linked securities news

Reinsurance broker Guy Carpenter has said that, while insurance-linked securities (ILS) investors and ILS funds fear financial market correlation emerging after a widespread cyber attack event, they shouldn’t fear the risk of a “double-whammy” from the risk side and their investments in other asset classes.

A new industry loss index specifically for primary cyber insurance market loss events in the United States has been launched by data aggregator PERILS AG alongside industry-backed cyber data firm CyberAcuView.

Having already sponsored two privately placed catastrophe bond issuances in 2023, Adrian Cox, the CEO of Beazley, the London headquartered specialty insurance and reinsurance underwriter, said he anticipates the company tapping the capital markets for more cyber reinsurance capacity in 2024.

The cyber insurance marketplace needs the backing of robust and healthy cyber reinsurance, cyber retrocession and cyber insurance-linked securities (ILS) markets, if it is to achieve its potential, according to S&P Global Ratings.

Cyber insurance-linked securities (ILS) will be “pivotal” to the future development and health of the cyber insurance and reinsurance market, according to comments from specialist insurance-linked securities (ILS) investment manager Fermat Capital Management today.

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.