Cyber ILS to be “pivotal” says Fermat, as it licences CyberCube’s IED

Cyber insurance-linked securities (ILS) will be “pivotal” to the future development and health of the cyber insurance and reinsurance market, according to comments from specialist insurance-linked securities (ILS) investment manager Fermat Capital Management today.

This morning, the cat bond and ILS investment manager said that it broadening its relationship with specialist cyber risk modelling company CyberCube.

Remember that Fermat Capital Management had already licensed CyberCube’s Portfolio Manager technology to help it gain a better understanding of cyber accumulation risks.

More recently, Fermat was named as a key investor in the Beazley cyber catastrophe bond, a landmark deal for the sector and one that we revealed CyberCube was the risk modelling agent for.

Fermat has now licensed CyberCube’s Industry Exposure Database (IED), which the modeller had launched back in October 2022.

The IED helps market participants, both markets and brokers, perform a range of benchmarking, sensitivity, and real-time analyses for cyber risks, which is critical in helping in understanding the exposure of the class of business in general, as well as for benchmarking and analysing any cyber ILS deals.

CyberCube’s IED is designed to work seamlessly with its Portfolio Manager software, which Fermat is already a user of.

Joanna Syroka, Fermat’s Director of New Markets, commented, “CyberCube’s Industry Exposure Database (IED) helps us to better understand the size and shape of today’s cyber insurance market and the drivers of its systemic risk.

“We believe cyber ILS will be pivotal to the industry’s ability to efficiently manage this risk in the future.

“The powerful insights generated by CyberCube’s IED will be key to helping the cyber ILS market develop to play this role effectively.”

Andrew Lukas, CyberCube Principal Client Account Manager, added, “The continued commitment by the Fermat team to the cyber marketplace is critical as it brings needed additional capacity from capital markets.

“CyberCube’s Industry Exposure Database will enable Fermat to leverage comparative insights and benchmarking as it models industry risk for insurance-linked securities. We are excited to expand our partnership as Fermat enables growth in the complex cyber insurance landscape.”