Commenting this morning alongside his agency’s results announcement, Beazley Chief Executive Officer (CEO) Adrian Cox stated {that a} “deep pool of capital” is required to help rising demand for cyber insurance coverage, whereas the corporate’s CUO Bob Quane famous that the capital markets at the moment are stepping up in help.
It’s not simply the transactions although, it’s the extra work that early cyber cat bond sponsors have put into serving to the capital markets perceive this new peril which have additionally made a distinction.
This morning, Beazley CEO Adrian Cox stated that, “To meet rising demand from purchasers for cyber insurance coverage we imagine it’s vital for the business to have access to a deep pool of capital which can enable it to hedge accumulation threat.
“We were therefore pleased, in January 2023, to be the first insurance company to launch a cyber catastrophe bond and to go further as the year turned with the launch of our first publicly traded cyber catastrophe bond.”
Bob Quane, Chief Underwriting Officer, additionally highlighted the significance of extra capability being available from reinsurance and insurance-linked securities (ILS) markets and the way that may help the expansion of cyber insurance coverage.
“The innovations Cyber Risks has made over the last 12 months in the development of cyber catastrophe bonds and in addressing systemic or catastrophic cyber risk, have been made possible by the team’s ongoing work on modelling cyber risk,” Quane stated. “We shared our method to modelling catastrophic cyber with the market throughout 2023, detailing our transfer to a probabilistic modelling framework which is underpinned by third celebration knowledge and our personal fashions to present better perception into cyber disaster situations.
“Looking forward there is growing business demand for cyber insurance and we are pleased to see that the insurance and capital markets are responding by providing the additional capacity the market needs to reach its potential.”
Beazley has additionally been working cross-market on the matters of systemic cyber dangers and cyber battle, with consensus nearing, CEO Cox defined.
“We are also seeing that broad market consensus is being achieved around the complex subject of cyber war, bringing clarity of purpose to the cover which is to the benefit of all,” he stated.
Clive Bannister, Chairman of the Board of Directors at Beazley, additionally stated, “Being a leader means both driving things forward and stepping back when market changes dictate. Leading is not easy, as the challenges in the cyber market this year have shown; but when systemic cyber risk needed to be addressed, Beazley was willing to ‘stand up’ and lead market thinking.”
CUO Quane, added, “2023 was additionally the second when the market started to mature and handle the challenges of systemic cyber threat, specifically the likelihood {that a} single cyber occasion or incident may set off widespread failures and dangerous impacts throughout a number of entities, sectors, or international locations. We took a number one position on this with the strong method we’ve got championed, thus succeeding in bringing a lot wanted readability to the prevailing battle exclusions. As we enter 2024, we’re seeing broad market consensus.
“In our Cyber Risks division, our focus is at all times on understanding threat to enhance our underwriting and defend towards rising threats. The substantial charge will increase of 2021 and early 2022 moderated throughout 2023 and we anticipate this development to be maintained.
“We are assured that with our cyber ecosystem in place, which offers complete help to purchasers earlier than, throughout and after a cyber attack, the surroundings stays engaging and demand-led development will proceed, notably throughout our worldwide business and significantly in Europe the place we see sturdy development alternatives.
“In particular we see an opportunity to grow among businesses with revenues below $250m, where our expertise and experience of managing cyber risk adds real value to their operations.”
Beazley’s cyber underwriting division underwrote $1.184 billion in insurance coverage premiums over the course of 2023, so solely barely up on the $1.157 billion written in 2022.
Read about Beazley’s cyber cat bond transactions, the three Cairney offers and its recent 144A Polestar Re cyber cat bond, by filtering our Deal Directory by peril to view solely cyber cat bond transactions.
Read more on Beazley’s 2023 results over at our sister publication Reinsurance News.
