Property Claim Services (PCS) has released a new Global Cyber Industry Loss Index for insured cyber losses with a minimum threshold of $20 million industry wide.
The cyber loss index was developed in collaboration with Capsicum Re in response to growing demand for an independent view of cyber industry loss estimates.
The new index gives re/insurers insight into industry losses for large non-elemental events globally, and can help facilitate reinsurance and alternative risk-transfer transactions as companies better understand losses and need for risk transfer.
Tom Johansmeyer, assistant vice president, PCS said; “Like PCS Global Marine and Energy, our latest entry into the specialty lines—PCS Global Cyber—benefited from the direct involvement of many players across the market.
“Over the past year, we’ve listened closely to the insurers and reinsurers pioneering cyber coverage and included their feedback to ensure we would bring a useful and reliable loss aggregation platform to market.
“We believe that the launch of this index could help grow an ILW market that could provide access to much-needed capital markets capacity and increase retrocessional activity—two key factors in growing the overall cyber insurance market worldwide.”
At the beginning of 2017, PCS moved into global specialty lines with the launch of PCS Global Marine and Energy; the release of the global cyber loss index marks a further step of the firm’s growth into the fast evolving cyber specialty re/insurance market.
Tim Tetlow, partner and chief operating officer, Hudson Structured Capital Management, called the expansion of PCS indices in recent years “a valuable contribution to the development of more orderly liquid markets. Their latest addition in cyber is important given the projected growth in this line of business.”
PCS said its historical database is complete and ready for use and includes estimates for recent events such as the Southwest system outage.
Recent ransomware attacks such as WannaCry have demonstrated the devastating potential losses connected to systemic cyber attacks; the cost of restoring systems after a ransomware event is said to have tripled since 2016, leaving many businesses and re/insurers unaware of their true cyber risk and raising demand for cyber loss measuring systems.
