cyber reinsurance

Insurance-linked securities (ILS) capital is increasingly becoming attracted to and getting more comfortable with deploying to cover cyber insurance and reinsurance risks, according to broker Guy Carpenter.

Beazley, the London headquartered specialty insurance and reinsurance underwriter, has successfully sponsored its second cyber catastrophe bond, Artemis has learned from sources, with the firm topping up its debut cyber cat bond using a second segregated cell to add $20 million of fresh reinsurance cover, through a Cairney II issuance.

Speaking at a webinar hosted by cyber-focused MGA and Lloyd’s coverholder Parametrix recently, Henning Ludolphs, Managing Director at reinsurance firm Hannover Re, suggested that now is a good time for potential cyber insurance-linked securities (ILS) investors to “get a foot in the door”.

When it comes to underwriting cyber risks, capital, whether traditional insurance and reinsurance, or alternative from the insurance-linked securities (ILS) market, “has to be rewarded”, Matt Harrison from risk modelling and analytics specialist Moody’s RMS, told us in our latest Artemis Live interview.

DeNexus, a specialist provider of cyber risk quantification tools and software, has updated its main cyber risk modelling platform, saying that it aims to give greater confidence to both reinsurance and insurance-linked securities (ILS) markets when it comes to understanding cyber risks.

The market for cyber insurance-linked securities (ILS) continues to develop, but as cyber insurance itself has not faced a catastrophic loss yet, AM Best believes the use of capital to buffer underwriting operations may end up revisited, when any major loss event occurs.

The recently launched cyber catastrophe bond from specialist insurer and reinsurer, Beazley, is a welcome innovation and an important addition to insurer’s “armoury against systemic risk,” according to Julian Miller, a London-based Partner at law firm DAC Beachcroft.

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.