Cyber insurance-linked securities news

Fitch Ratings, a provider of credit ratings, research, and risk analysis, expects to see a further expansion of alternative reinsurance capacity in 2025, supported by cyber catastrophe bond issuances, which will add to the reinsurance sector’s capital base and help absorb earnings volatility.

Since their introduction to the market in 2023, there’s now been 10 cyber cat bonds, and CyberCube, the cyber risk analytics provider, expects their coverage, along with cyber insurance-linked securities (ILS) solutions to narrow and become more targeted going forward.

According to broking group Howden, inflows are accelerating in ILS arrangements for casualty, managing general agents (MGAs), cyber insurance-linked securities (cyber ILS) and reinsurance sidecars, as capacity providers look to grow existing premium pools.

Lockton Re, the reinsurance arm of the independent broking group, has now confirmed the role former Gallagher Re executive Theo Norris has taken at the firm, appointing him UK Capital Markets Structuring and Cyber ILS Leader.

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.