51
November 2019
Bermuda:Re/insurance+ILS
ILS
As reinsurers grapple with the opportunities and
challenges presented by cyber risk, ILS could provide at
least some of the solutions. Tom Johansmeyer, head of
PCS, reviews the prospects that cyber opens up.
Are you excited about the growth of the cyber market?
If we don’t get the insurance-linked securities (ILS)
sector engaged in cyber soon, there will be a lot less to
celebrate in the next few years. Without access to more
capacity, cyber insurance growth will be harder to fuel.
Not everyone agrees with me on this. Let’s take the London
Market, for example. There’s a belief across the Atlantic that London
has ample cyber reinsurance capacity available. This may be true,
depending on how narrow your views of “ample” and “capacity” are.
Can the London Market support very specific types of commodity
cyber growth? Probably. Is that the entirety of what the global cyber
market needs? Absolutely not.
If you’re taking a global view of the cyber market, don’t believe
what you hear in the London Market, especially if you hear it after
4pm on a Friday afternoon at The Grapes.
Out here in Bermuda (and in the rest of the world), perceptions
of the cyber reinsurance market’s near-term challenges are more
nuanced. There’s sufficient capacity worldwide to fuel growth,
although not enough to support the full set of needs of cedants (and
end insureds) likely to arise in the next year or two, and the capacity
discussion in general often leads to a retro discussion specifically.
As reinsurers develop appetites for retrocessional protection,
they’re quickly finding the community of capacity providers to be