cyber risk

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.

Beazley is “proud” that insurance-linked securities (ILS) investors backed the “high quality” of its cyber underwriting portfolio and supported its sponsorship of a ground-breaking first cyber catastrophe bond, CEO Adrian Cox has said.

London headquartered specialty insurance and reinsurance firm Beazley has successfully secured $45 million of cyber risk reinsurance from capital market investors including insurance-linked securities (ILS) specialist Fermat Capital Management, in what is being termed the first cyber catastrophe bond, the Financial Times has reported this morning.

Global reinsurance giant Swiss Re has said this morning that the industry needs to adopt a different approach to cyber risk underwriting, while also repeating its call for the development of a cyber insurance-linked securities (ILS) marketplace.

Enhancing the terms and conditions around cyber insurance and reinsurance coverage, especially around cyber warfare and what is excluded from policies, is an important factor that can attract new capacity, including from the capital markets, Claudia Hasse of Munich Re has explained.

The fourth session at our Artemis London 2022 conference on September 6th featured a keynote speech and a panel discussion, both focused on the potential for cyber risk catastrophe bonds and what the market needs to do for the first cyber cat bond to be issued.

Cyber risk modelling specialist CyberCube has launched a set of exposure databases for cyber risk, claiming them as the first of their kind, something seen as a key pre-requisite for broader cyber insurance-linked securities (ILS) activity.