LONDON, 21st FEBRUARY 2023 - Lockton Re, the global reinsurance business of the world’s largest privately held independent insurance broker, has today launched a new report — Unlocking Potential: Why now is the time Cyber Insurance-Linked Securities (ILS) has the momentum to succeed — working with CyberCube Analytics and Envelop Risk to create a market wide perspective.
The cyber insurance market continues to mature and grow dramatically. At the same time there has been growing model maturity, as data and understanding of the peril have all developed in recent years.
Oliver Brew, lead author of the report and London Cyber Practice Leader for Lockton Re, comments, “The mechanisms and methodology behind cyber modelling are becoming better understood, and the strength of the data and frameworks being utilised is increasing all the time, meaning the potential for cyber ILS investments can be leveraged to play a critical role in unlocking capacity required to continue developing the wider cyber insurance market.”
There has also been a more positive view of cyber risk by ILS investors. Brittany Baker, CyberCube Vice President of Solution Consulting and co-author of the report, comments, "ILS investors are becoming more comfortable with cyber risk, but further education is needed on how cyber models work. Market-leading participants are increasingly demanding enhanced exposure management reporting that allows for more in-depth business intelligence reporting and more sophisticated strategic decision-making."
“There are compelling arguments that the time is right for investors to support cyber ILS,” comments David Ross, Executive Vice President of ILS & Capital at Envelop Risk. The class is in a secular hard market driven by increasing digitisation and growing insurance penetration. Those with access to data and a modelling advantage can build well-diversified and profitable portfolios to meet investor risk-return preferences. Structures exist to manage capital efficiently without dilution of returns from excessive collateral trapping.”
Oliver concludes, “This report supports the massive opportunities which arise from the continued demand for cyber (re)insurance which will only be further enhanced by the successful execution of cyber ILS transactions.”
Click here for full report.
For further information please contact:
Global Head of Marketing, Lockton Re
Direct Tel: +44 (0)7795 400981
Head of Marketing, North America Lockton Re
Direct Tel: +1 445 248 2228
About Lockton Re
Lockton Re, the global reinsurance business of Lockton Companies, helps businesses understand, mitigate, and capitalise on risk. With over 300 colleagues in 15 locations globally, the business is continuing to grow, pushing the reinsurance industry forward with smarter solutions that leverage new technologies—delivered by people empowered to do what’s right for clients.
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About CyberCube (cybcube.com)
CyberCube delivers the world’s leading cyber risk analytics for the insurance industry. With best-in-class data access and advanced multi-disciplinary analytics, the company’s cloud-based platform helps insurance organizations quantify cyber risk to facilitate placing insurance, underwriting cyber risk and managing cyber risk aggregation. CyberCube’s enterprise intelligence layer provides insights on millions of companies globally and includes modeling on thousands of points of technology failure.
The CyberCube platform was established in 2015 within Symantec and now operates as a standalone company exclusively focused on the insurance industry, with access to an unparalleled ecosystem of data partners. It is backed by Morgan Stanley Tactical Value, Forgepoint Capital, HSCM Bermuda, MTech Capital, individuals from Stone Point Capital and Scott G. Stephenson. For more information, please visit www.cybcube.com or email email@example.com.
About Envelop Risk
Envelop Risk (enveloprisk.com) is a global specialty cyber underwriting firm based in London (UK) and Bermuda. The firm began underwriting cyber risk in late 2018 and has established itself as a leading cyber reinsurer globally, with over $600m in GWP underwritten to date. Envelop’s mission is to become the leading global capital allocator for cyber-related risk by combining superior capital management, underwriting, structuring, and data-driven proprietary modelling. Envelop’s advanced cyber modelling tools include threat intelligence, cyber posture analytics, global economic and financial data, and comprehensive global claims history. The firm is backed by Softbank Vision Fund 2, MS Reinsurance, Alpha Intelligence Capital, Integra Partners, and Chimera Abu Dhabi.
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