Ariel Re and Hiscox Re & ILS have announced the formation of CyberShock, a cyber catastrophe consortium.
This new entity, touted as the first of its kind in the industry, aims to provide up to $50 million in per-program capacity to support cyber insurers globally.
CyberShock is also designed to ensure better certainty of coverage for significant cyber incidents, including service and hardware supply chain events, cyber propagation events, software supply chain disruptions, and catalytic cyber events.
According to both reinsurers, this consortium also represents a strategic initiative to address systemic risks that have been constraining growth in the cyber insurance market.
Daniel Carr (pictured above, left), head of cyber at Ariel Re, emphasized the necessity of such an initiative as cyber catastrophe risk continues to be a major concern for the re/insurance market.
“Ariel Re is an established market for property catastrophe risk and has taken a lead role in the development of cyber catastrophe reinsurance products in recent years – increasing our reach in this area made sense. We wanted to find another leading reinsurance market to support engagement and involvement across the wider market, and Hiscox Re & ILS was the perfect partner given their long-standing cyber expertise,” Carr said.
Matthew Wilken (pictured above, right), chief underwriting officer at Hiscox Re & ILS, also commented on the partnership with Ariel Re and the firms’ “shared goals.”
“Against a backdrop of both a lack of clarity around cyber event definitions and meaningful capacity in the cyber reinsurance marketplace, we believe the CyberShock consortium can act as a positive catalyst for the market,” Wilken said.
The reinsurers also note that the launch of CyberShock marks a significant step forward in developing robust responses to the increasingly complex landscape of cyber risks, providing insurers with more tools to manage potential catastrophes effectively.
What are your thoughts on this story? Please feel free to share your comments below.
