cyber insurance

The development of a robust cyber retrocessional reinsurance market and the use of insurance-linked securities (ILS) or alternative capital, would help the cyber insurance market with its capital management and make much-needed capacity available, according to S&P Global Ratings.

Envelop Risk, a company that had a managing general agency (MGA) and data driven approach to providing cyber risk analysis and reinsurance underwriting products has raised a significant $130 million Series B financing led by major investor SoftBank and now targets becoming a risk taker as well.

Specialist cyber focused underwriter CFC has announced that backing for its newly launched Lloyd’s Syndicate 1988 includes an insurance-linked securities (ILS) fund, a large pension fund, and also reinsurance firms based in Bermuda, Cayman and Japan.

Underwriting of cyber insurance and reinsurance risks is going to require “massive amounts of additional capital” to support what is expected to be a particularly fast-growing class of business, according to broker Gallagher Re’s Ian Newman.

The evolution of the cyber reinsurance sector has seen a significant shift in market structure to something much more palatable for providers of insurance-linked securities (ILS) capacity, according to Ari Chatterjee, Chief Underwriting Officer (CUO) at Envelop Risk.

Within both the market and contracts the exclusion of communicable diseases is unsurprisingly a key focus, but there are other, similarly difficult to predict losses that companies should be examining, according to industry experts.

Hudson Structured Capital Management Ltd., which enters into insurance and reinsurance investment business as HSCM Bermuda, has teamed up with broking powerhouse Aon for a new cyber catastrophe coverage product, that can cover systemic cyber risks for insurance and reinsurance ceding companies.

The increasingly sophisticated participants within the insurance-linked securities (ILS) market aren’t going to lap up just any cyber exposure that comes their way, the deals have to make sense, according to Tom Johansmeyer, Head of PCS.

PCS, the provider of industry loss estimates and loss data globally, has launched its first non-loss reporting platform, Cyber RLM, which will provide users with unique insights into large insured cyber risks around the globe.

The way we think about accumulations of cyber risk is a bit like COVID on steroids and the potential size of economic losses from major cyber loss events means private capital is needed to support the risk but that a public-private approach is required, AXIS Capital CEO Albert Benchimol has explained.