We’ve discussed other findings from the recent Bermuda Monetary Authority (BMA) report, but we’re also struck by the increase in cyber insurance captives and cyber ILS vehicles documented by the financial regulator. The growth of Cyber Insurance Captives and Cyber ILS (Insurance-Linked Securities) is all related to the growth of reinsurance in the cyber market; Re policies covered almost half of 2022’s $1.2 billion aggregate-incurred-cyber losses, according to an estimate cited by the BMA.
“In 2023, Bermuda insurers issued a number of cyber-specific ILS, providing a total coverage of $670 million, which is quite significant for its first year of issuance,” says the regulator, which predicts continued growth, bolstered by improving cyber risk modeling.
The captive cyber insurance sector in Bermuda has also been scaling. Captive insurers writing cyber policies, says BMA, jumped from 28 in 2021 to 33 in 2022. That year Gross Written Premiums (GWP) for cyber increased 14%, reaching $172 million (one captive accounted for 62% of that total).
If BMA is right about a $900 billion annual global cyber protection gap, we expect to see another jump in cyber captives and cyber ILS in their next report.
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