PERILS & CyberAcuView’s US cyber loss index used for cat bond and ILW

The US cyber insurance industry loss index launched by PERILS AG and CyberAcuView has been used for both a 144A cyber catastrophe bond and a cyber industry-loss warranty (ILW) transaction, the companies have said.

The new industry loss index that covers primary cyber insurance market loss events in the United States was launched in September 2023 by data aggregator PERILS alongside industry-backed cyber data firm CyberAcuView.

We had covered the first 144A cyber industry loss cat bond that was sponsored by Swiss Re through the fourth-quarter of last year.

Swiss Re secured $50 million of cyber retro on an industry-loss trigger basis with the Matterhorn Re Ltd. (Series 2023-1) issuance that settled last December.

PERILS and CyberAcuview confirmed that their index was used for this first cyber 144A ILS to be placed using an industry loss trigger, as well as another transaction which was an an ILW reinsurance contract.

The index reports affirmative US primary cyber insurance market losses from systemic cyber incidents that affect more than one insurer and policyholder for events exceeding a US $500 million industry loss.

Christoph Oehy, CEO of PERILS, commented, “We are very pleased our loss index has been used in transactions so soon after launch. In recent months, we have engaged closely with the market, while risk protection sellers and buyers have undertaken extensive due diligence on the index. It is clearly a very positive development to see its acceptance by the industry as demonstrated by these placements.

“As the risk of systemic cyber loss events grows, it is increasingly important to ensure sustainable capacity is available to support the US cyber sector. We believe our loss index can play an important role in enabling the expansion of the cyber-ILS and ILW markets by providing independent systemic loss estimates.”

Mark Camillo, Chief Executive of CyberAcuView, added, “We are very excited by the level of interest in the index since launch. CyberAcuView’s original mission was to make available reliable US cyber insurance industry data which can be used to better understand cyber risk. In recent months, there has been various discussions with industry players regarding key industry topics such as event definitions and war exclusions. I personally found this engagement very positive and it highlights the need for the industry to cooperate closely to expand capacity. It also became evident during this process there is an increasing interest in cyber risk by many protection sellers which we hope presents opportunities for the index to be used in future transactions.”

Nick Meuli, Head Capacity and Platform Management at Swiss Re, also said, “We are pleased to have worked with PERILS and CyberAcuView on the world’s first 144a Cyber index cat bond. Independent indices are an important aspect in bringing more alternative capital into the market, something we believe is key for the further growth of the cyber market.”