Cyber

Spectrum joins investors ForgePoint, Hudson and MTech.

It is understood that CyberCube has been considering a sale of the business.

The broker has noted that double-digit reductions are increasingly available in property.

Cat bond broking growth contributed to 6% organic growth in reinsurance.

Sources believe the market will grow gradually over years after its initial cluster of dealmaking.

Richard Pennay also addressed the dip in cyber ILS activity.

The renewal and upsizing of the Trouvaille E&S sidecar highlighted the market’s potential.

The deal is 45% larger than 2024’s issuance after attracting a “greater number of investors”.

The former Credit Suisse ILS head Niklaus Hilti said working on life buyout hedges could rejuvenate the life ILS market.

Novelty premiums will likely fade once investors are more comfortable with the risk.

CEO Adrian Cox said Beazley’s recent $290mn ILW purchase was not driven by “capital flexibility in and of itself”.

The deal has reduced the carrier’s one-in-250-year cyber loss scenario from $651mn to $461mn.

The deal is offering a multiple of 11.3x on the expected loss.

The bond offers a multiple of 11.3x based on a modelled expected loss of 0.93%.

The bond is offering a spread range of 950-1,050 basis points.

Portfolios of clients of varying size in the same region aggregate more risk.

Building better exposure datasets could draw a broader range of investors.

The insurer currently has $300mn of reinsurance limit from cyber cat bonds.

The July downtime will increase relevance, demand and innovation for the market.

The carrier estimates the total industry loss for the Microsoft/CrowdStrike outage at around $1bn-$2bn.

The broker said less than 1% of companies globally with cyber insurance were impacted.

The firm said losses could fall under $300mn if more favourable assumptions were applied.

The profile of the loss could provide comfort to investors around exposure diversification.

The event would represent a loss ratio impact of roughly 3%-10% on global cyber premiums of $15bn today.

The market is expected to seek additional exclusions around systemic events.

The weighted average direct financial loss for a Fortune 500 firm was $44mn.

Hannover Re's cyber bond pays on a parametric basis for each hour after an agreed waiting period.

The analyst estimated Beazley’s loss from the global outage at $80mn-$120mn.

The current guidance is that Beazley will publish an undiscounted CoR in the low-80s at full year.

The event could unpack issues around accumulation risk and cloud services.

ILS capital so far is viewed by sponsors as strategic rather than essential.

The second part of the PoleStar Re issuance takes the bond's total volume to $300mn.

State interference is likely to be required if an attack is large enough to trigger bonds now on the market, experts say.

The consortium will offer up to $50mn of per-program capacity.

The ILS market’s exposure could grow to $1.5bn by the time a major cyber cat event occurs.

The reinsurer said it hopes to grow the size of the $13.75mn deal over time.

Stefan Sperlich will lead the new unit as managing director.

Revenue, country and industry sector drive modelled output divergence.

Liquidity is a key driver of investor activity.

Some $415mn of capacity entered the market last year.

The client lacked options in the conventional insurance market.

Envelop SPA 1925 was launched at the start of the year with Chris Baddeley as active underwriter, based in London.

The $50mn bond provides coverage against systemic cyber events in the US and District of Columbia.

George Mawdsley joins after more than 10 years at Securis, where he was tasked with structuring and origination of ILS risk.

The carrier has also extended the redemption period by three years, to 31 March 2029.

The transaction is the second cyber cat bond in 144A format to price and follows Axis’s Long Walk Re deal in November.

The 144A cyber cat bond deal has increased in size from an initial target of $75mn.

The year brought a degree of closure on the loss-hit years of 2017-2021, while the outlook remains changeable for ILS managers.

Chubb’s East Lane Re bond is the third cyber cat bond in 144A form to enter the market.

The $75mn Long Walk Re deal secured broad market support from ILS investors.

The $75mn cat bond will cover systemic cyber events on a per-occurrence basis.

The $75mn cat bond is expected to close in late November.

Sources have raised concerns that cedant demand could outpace available capacity for cyber cat bonds.

Executives said geopolitical uncertainty, economic stagnation, cyber, cat events and inflation will drive demand on the Continent.

The US could be exposed to economic losses of $1.1tn in the event of a cyberattack, the highest of any country.

Cyber reinsurance has around $500mn of annual capacity currently supporting the space.

A number of players suggested that the cost components of first-party claims were up between 30%-50% on that seen during Ransomware Wave One.

Experts at the Trading Risk New York conference emphasised in-built cyber risk protections from defences to exclusions, as ILS managers grapple with understanding the peril.

The founding members include Munich Re, Gallagher Re, and BitSight.

The carrier describes reinsurers’ current strategy of dealing with cyber policies as "a game of whack-a-mole"

The broker studied the impact of 14 major cyber events in its attempt to dispel ILS manager fears of a ‘double whammy’ cyber event that would also impact financial markets.

The new SPA will write cyber reinsurance initially and could progress to writing insurance.

The cyber MGA can now serve clients in Italy, Spain, Ireland, Sweden and Denmark.

A Guy Carpenter report recently noted that risk models are converging for the most remote risk levels.

The broker named Matthew McCabe as MD of cyber broking with a brief to tackle complex cyber issues.

New language has been introduced by some insurers to limit exposures to cyber risks.

Analysis showed a modelled loss range of between $15.6bn and $33.4bn for a 1:200-year global loss event.

In a discussion at Trading Risk’s London ILS 2023 conference, panellists compared the current cyber ILS market to the cat market in the 1990s.

Spectra has in-principle approval for a Bermuda broker license but believes cyber ILS solutions will be a game of “slow progress”.

It is understood that the company has mandated Nomura to raise the risk capital.

Reinsurers congregating in Bermuda flagged a lack of interest in helping under-capitalised Floridian insurers and under-priced diversifiers, with positive implications for ILS participation.

Beazley executives spoke of further growth prospects in the class, after its results revealed a 79% combined ratio for its cyber division in 2022.

Structures have been developed that would avoid “excessive capital trapping”.

The transactions would protect ceding (re)insurers against outages of the cloud.

The regulator examined carriers’ ability to model nat-cat and cyber events, with mixed results.

Beazley’s bond was hailed as a “great first step” but challenges remain, although others are already working on narrower cloud outage transactions.

The transaction is the first proportional deal for cyber risk in the capital markets.  

Beazley’s $45mn first-time cyber cat bond offered all-perils coverage, though some expected early deals to start with limited scope.

Scott Stephenson, former chairman, president and CEO of Verisk, will join CyberCube’s board after participating in the funding round.

The two ILS firms were among those participating in a $20mn fundraise for Elpha Secure Technology.

The deal will bring cyber modelling and analytics to the risk transfer market.

Cyber risk ILS will grow slowly in the short-to-medium term, S&P Global Ratings has predicted.

Envelop anticipates that cyber ILS could hit $100mn of GWP within four years

Guy Carpenter, Aon and Gallagher Re are each understood to be preparing to enter the nascent sector.

The follow-only vehicle initially launched in January with a more limited set of permissions.

Experts say cyber ILS offerings including cat bonds could be near, but concerns over structures, modelling and correlation persist.

Cyber reinsurance premiums may exceed those of property cat by 2040.

The move reflects the firm’s growing interest in risks beyond nat cat.

Another pandemic outbreak came in fourth place, with 22% of respondents saying they were worried about further health and workforce issues and movement restrictions in 2022.

Some programs had to be restructured as rates hardened and capacity flowed away from cat risk in some cases.

The change in plan comes as Lloyd’s restricts cyber growth.

CyberCube forecast further capital market capacity will hit the cyber insurance market next year.

The Lloyd’s chief of markets also highlighted inflationary risks as a trend of which to be aware for syndicates.

Theo Norris has joined Gallagher Re as a dedicated cyber ILS broker, moving from his Aon Securities role as acting ILS assistant vice president.

Maya Bundt referred to cyber security threats as the “dark side” of proliferating digitalisation.

AM Best sees accumulating cyber risk in the US property market downgrading 18 US property carriers, considering Best’s Capital Adequacy Ratio.