Specialist insurer Beazley has secured additional catastrophe cover for cyber events through the launch of a new reinsurance product in collaboration with Bermuda-based reinsurer, RenaissanceRe (RenRe), and which is backed by the capital markets.
An announcement on the deal reveals that the vast majority of the security behind the deal will be provided by capital sources structured by RenRe, and it is one of the first catastrophe cyber reinsurance solutions backed by the capital markets.
For Beazley, the placing of cyber risk into the capital markets opens a larger source of capital that the firm can leverage to support its expanding affirmative cyber offering in excess of levels that are currently available in the traditional market.
The potential losses from the very complex and ever-changing cyber exposures of the world are truly huge and unknown, and as such, it has often been said that the traditional reinsurance market lacks the scale to go it alone, with the involvement of the capital markets required to seriously address this peril.
The combination of RenRe’s long track record of matching risk and capital to develop innovative solutions with Beazley’s deep cyber expertise and claims data, has resulted in the establishment of this collaborative cyber risk solution.
Beazley’s Chief Underwriting Officer (CUO), Adrian Cox, said: “As the scale of the cyber threat to businesses continues to intensify, the challenge to the insurance industry is to ensure we continue to provide cover that responds as the risk evolves and capacity that is commensurate to the size of the risk. We are delighted to partner with RenaissanceRe to deliver valued cyber cover to our growing client base whilst managing accumulations of risk within the group’s tolerances.”
David Marra, RenRe’s CUO – Casualty & Specialty, added: “We are pleased to partner with Beazley to provide a solution to businesses seeking higher levels of cyber insurance cover. Our ability to address the emerging challenges of the market by structuring attractive opportunities for investors is a hallmark of RenaissanceRe’s creative approach to risk selection, capital management and client service.”