cyber reinsurance

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.

In an interview with Artemis, specialist provider of software for cyber risk quantification for large industrial and critical infrastructure corporates, DeNexus, argues that a more granular approach to assessing cyber risk is needed to remove some of the guess work, which in turn will make investors more comfortable allocating capital.

The development of a cyber insurance-linked securities (ILS) market is underway, but given the differences in how investors and portfolio managers can diversify within cyber risk, this will likely mean a “different distribution of capital,” is seen, Gallagher Re executives told Artemis.

Stone Ridge Asset Management, the New York based asset manager an alternative risk premia focus, including reinsurance and insurance-linked securities (ILS), has provided US $100 million in capital to support an innovative retrocession cyber quota share arrangement for global reinsurance firm Hannover Re.

The just over $45 million of private cyber catastrophe bond notes issued, by the Artex SAC vehicle using its segregated account named Cairney on behalf of sponsor Beazley, have now been listed on the Bermuda Stock Exchange (BSX).

The cyber risk market is projected to triple in size over the next three to four years, and for that growth to be achieved, solutions like the first cyber insurance-linked securities (ILS) transaction will be vital, according to Paul Bantick, Global Head of Cyber Risks at Beazley.

Cyber risk analytics and quantification software specialist CyberCube has now confirmed that its Portfolio Manager risk model was used for the landmark first catastrophe bond deal sponsored by re/insurer Beazley.

Educating insurance-linked securities (ILS) investors was one of the keys to bringing Beazley’s cyber catastrophe bond successfully to market, according to Ian Newman and Theo Norris of Gallagher Re.

The landmark first cyber catastrophe bond sponsored by London headquartered global underwriter Beazley was issued using an Artex Risk Solutions cat bond and collateralized reinsurance note issuance vehicle, while the risk analysis was undertaken using a risk model from specialist firm CyberCube, Artemis has learned.