Insurance-linked securities (ILS) market for cyber risks offers new capital solutions for managing systemic cyber events, Gallagher Re reports.
The cyber insurance-linked securities (ILS) market is rapidly emerging as a source of alternative capital for the cyber insurance sector, with more than $750 million of capital deployed in CAT bonds alone, according to a report from Gallagher Re.
“Cyber ILS addresses two significant challenges in the cyber insurance market. Firstly, as the market is expected to more than double in size over the next decade due to increased awareness of cyber risks, ILS provides a broader capital base to support sustainable growth. Secondly, it bolsters market resilience by offering vital alternative capital during systemic cyber events, ensuring stability and aiding recovery when traditional insurance markets may face capacity constraints,” the report stated.
The cyber ILS market has rapidly evolved since its inception in January 2017, when the first collateralized quota share reinsurance transaction for cyber risk took place. This pioneering deal…
