As generative AI continues to grow and expand across the re/insurance sector, the technology’s use for both good and ill will “continue to be the unknown risk in 2024”, Paul Bantick, Group Head of Cyber Risks at global specialist insurer Beazley, has said.
On the back of this rapidly developing technology, Bantick explained that the company’s Risk & Resilience research shows that concern over cyber risk will continue to “dominate business executives’ risk agendas,” with 27% saying that cyber will be their key risk in 2024.
“Based on the growth we see, we anticipate that the cyber market will triple in size over the next three to four years,” Bantick said.
“To meet this demand we need a dynamic cyber market, which includes effective solutions for catastrophe risk to enable the supply of quality capacity to the cyber (re)insurance market to increase, and meet the growing demand for cover.”
Moreover, after Beazley pioneered the first privately placed cyber catastrophe bonds, Bantick said that it has been “pleasing” to witness recent cyber cat bond market developments, as the first 144A transactions came to market.
You can read about the three private cyber cat bonds that Beazley sponsored in 2023 on our sister publication, Artemis.
In addition, Bantick noted how over the last 12 months the industry has seen the creation of the market for cyber insurance-linked securities (ILS), following the first-ever cyber catastrophe bond that Beazley launched back in January 2023.
He said: “We hoped that this would lead to growing interest in these transactions, bringing in the additional capacity needed to meet the growing demand for cyber insurance from businesses and society.”
Bantick also stated how it “has been pleasing to see other cyber catastrophe bonds get off the ground this year.”
Looking ahead into 2024, Bantick explained that the company predicts that the industry will see an increase in the number of cyber bonds launched, as the market “evolves, grows, and moves more mainstream.”
