cyber insurance

Parametrix, the company that launched as a specialist in parametric cloud downtime cyber insurance and reinsurance protection, has expanded its range of parametric cyber related insurance offerings, launching a new product focused on digital system interruptions and technology performance guarantees.

Analysis from broking group Aon and Parametrix, a specialist in parametric cloud downtime cyber risk transfer, shows that it is possible to gain diversification within cyber portfolios that have cloud outage risk concentrations, with geography one way to achieve that.

New growth projections for the global cyber insurance market suggest a massive need for reinsurance and risk capital, of which the insurance-linked securities (ILS) market is expected to become a key source, according to CyberCube.

Concerns over how a cyber catastrophe loss event could manifest mean many insurance-linked securities (ILS) investors remain cautious when it comes to considering allocating to cyber catastrophe bonds and reinsurance, but interest continues to rise and broker Lockton Re expects more efficient capital will flow to cyber risks in time.

Specialist re/insurer Beazley said this morning that it aims to develop a “vibrant” cyber reinsurance market with the help of insurance-linked securities (ILS) investors, while also noting that the recent CrowdStrike IT outage has shown its cyber underwriting was resilient to such a loss event.

According to reinsurance broker Guy Carpenter, CrowdStrike is not a particularly significant cyber catastrophe event and only represents a “Kitty Cat”, or mid-sized catastrophe loss, while the broker estimates industry losses will be between $300 million and $1 billion.

Lockton Re, the reinsurance arm of the independent broking group, has hired Theo Norris from Gallagher Re to become its first Head of Cyber ILS.

Property Claim Services (PCS), the unit of Verisk that is a provider of industry loss estimates and loss data globally, has designated the recent CrowdStrike linked global IT outage as a PCS Cyber Catastrophe Loss Event, meaning industry insured losses are expected to reach above US $250 million, Artemis has learned.

The US cyber insurance industry loss from the recent CrowdStrike related IT outage is expected to come in below $1 billion, according to specialist insurer Coalition, with the company saying its modelling suggests a lower bound of $270 million or even lower, while the upper-bound is $960 million.

The recent global IT systems outage caused by the CrowdStrike event can serve to build more confidence in cyber catastrophe bonds, as some of the biggest questions posed about this new segment of insurance-linked securities (ILS) were about how losses from a major cyber event would manifest, Jonathan Hatzor, CEO of Parametrix told us.