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Laurel Di Silvestro, principal client services, and Matthew Silley, client services manager, at CyberCube, take a look at how catastrophe modelling could help spur growth in cyber ILS.
For the past 20 years, the capital markets have offered crucial capacity for certain catastrophe-prone perils and regions where traditional insurance and reinsurance capacity has been hard to secure at acceptable terms and conditions.
There is a growing consensus that certain peak cyber perils, defined as accumulations of exposure in a common technology or software, could have systemic impact if compromised.
For these peak risks, there is expected to be a need for the capital markets to provide alternative insurance-linked instruments to alleviate the catastrophic financial impact of cyber-related events. However, the cyber re/insurance market is still relatively immature and capital market investors are just beginning their education on the potential financial impacts of systemic cyber events to the re/insurance industry.
CyberCube, ILS, cyber risk, loss, modellers, modelling