Global reinsurance firm Swiss Re has purchased the market’s first cyber retrocession industry loss warranty (ILW), securing $50 million of catastrophic US cyber insurance event protection.
Cover also includes protection against widespread malicious ransomware or malware, prolonged catastrophic cloud outage and systemic data breach.
Nick Meuli, Head of P&C Capacity Management at Swiss Re, commented: “Accessing alternative external sources of cyber capacity to support our inwards cyber business has been a key priority for us. We are very pleased to have secured significant ILW protection which provides yet another novel and complementary cover for our cyber portfolio.”
This cyber Retro ILW was brokered by Gallagher Re and supported by a number of specialist reinsurers.
Ian Newman, Global Head of Cyber at Gallagher Re, said: “Alongside traditional retro and cat bond solutions, we believe ILWs and parametric solutions will form a critical part of the cyber value chain in the coming years. We are proud to have delivered another market first on behalf of Swiss Re, a true market leader in this space.”
Its launch reflects a market which is growing in confidence, a cyber cat bond market that continues to develop at pace, with more growth expected in the months and years to come, the broker noted.
Theo Norris, Head of Cyber ILS at Gallagher Re, added: “Successfully executing this innovative solution for Swiss Re is another step forward in broadening the potential access for capital to enter the Cyber insurance space and to provide effective, alternative solutions for insurers and reinsurers alike.”
The news of Swiss Re’s purchase of cyber market’s first Retro ILW follows the successful launch of PoleStar Re underwritten-rule 144A cyber catastrophe bond in December.
The trade was structured and placed by Gallagher Securities, with expertise provided by the Gallagher Re Cyber team and achieved an 87% upsize in marketing to $140 million.
Artemis, our ILS-focused sister publication, tracks the catastrophe bond market and lists transactions since the market’s inception in the late 1990’s. The Artemis Deal Directory shows 2023 was a record year for overall cat bond issuance, and as well as for 144a property cat bond issuance.
