PERILS, the Zurich-domiciled catastrophe insurance data provider and CyberAcuView, an independent US-domiciled cyber insurance data provider, have announced the use of their US Cyber Industry Loss Index in the first cyber insurance risk transactions.
The Index is used to produce an index value to determine the payouts of the protection under insurance-linked securities (ILS) and industry loss warranty (ILW) contracts.
Launched in September 2023, the US Cyber Industry Loss Index reports on US primary cyber market losses exceeding $500 million caused by systemic cyber incidents affecting more than one insurer and policyholder.
With systemic cyber loss risk growing, the Index is designed to provide an independent cyber industry loss estimate arising from US systemic loss events for use in alternative capital transactions.
Christoph Oehy, Chief Executive Officer, PERILS, commented, “We are very pleased our loss index has been used in transactions so soon after launch. In recent months, we have engaged closely with the market, while risk protection sellers and buyers have undertaken extensive due diligence on the index.
“It is clearly a very positive development to see its acceptance by the industry as demonstrated by these placements. As the risk of systemic cyber loss events grows, it is increasingly important to ensure sustainable capacity is available to support the US cyber sector. We believe our loss index can play an important role in enabling the expansion of the cyber-ILS and ILW markets by providing independent systemic loss estimates.”
The cyber industry losses are based upon loss data collected from US cyber insurers by CyberAcuView with subsequent industry-level calculations jointly signed off by both companies.
Since its launch, PERILS and CyberAcuView have actively engaged with major stakeholders in the industry to raise awareness and acceptance of the loss index. This extensive work culminated in the first cyber 144a ILS being placed using an industry loss trigger (sponsored by Swiss Re) as well as an ILW reinsurance contract which was completed using the index.
Mark Camillo, Chief Executive, CyberAcuView, added: “We are very excited by the level of interest in the index since launch. CyberAcuView’s original mission was to make available reliable US cyber insurance industry data which can be used to better understand cyber risk. In recent months, there has been various discussions with industry players regarding key industry topics such as event definitions and war exclusions.
“I personally found this engagement very positive and it highlights the need for the industry to cooperate closely to expand capacity. It also became evident during this process there is an increasing interest in cyber risk by many protection sellers which we hope presents opportunities for the index to be used in future transactions.”
Nick Meuli, Head Capacity and Platform Management, Swiss Re, cocluded, “We are pleased to have worked with PERILS and CyberAcuView on the world’s first 144a Cyber index cat bond. Independent indices are an important aspect in bringing more alternative capital into the market, something we believe is key for the further growth of the cyber market.”
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