“This paper makes the compelling case for cyber ILS, having addressed the common objections. The massive opportunities which arise from the continued demand for cyber (re)insurance will only be further enhanced by the successful execution of cyber ILS transactions. This will increase (re)insurance capacity, as well as isolate cyber catastrophe risk into a tradeable format. There is an acknowledgment, that as in any new category of investment, progress may be incremental, relatively small scale at first,
and slow. The early trades may be harder to execute, but once those innovators seize the first mover advantage, there will be many following on. For now, in 2023, the ingredients are there for momentum to grow.”
Insurance-Linked Securities have played a key role in allowing catastrophe risk to be transferred from the commercial insurance market to investors, providing much needed additional (re)insurance capacity. There has been talk for years about the potential of cyber ILS to transform the cyber insurance market. The conditions of the market today are at a point where this potential can be fulfilled. Working with Cybercube Analytics and Envelop Risk, Lockton Re have created a market wide perspective on this topic.
Source: Cyber Report | Lockton