5 February 2020ILS

First of its kind parametric cloud outage product sold on AkinovA

An unnamed Asian technology company has purchased a parametric cloud outage product on AkinovA, the electronic marketplace for trading re/insurance risk, to protect itself against the risk of a cloud service provider outage.

The Bermuda Monetary Authority (BMA) provided oversight for the trade which was executed under the terms of AkinovA’s regulatory sandbox licence and completed on January 30. AkinovA said the purchased security was the first of its kind insuring cyber risk.

The term of the parametric product was set at three months, enabling the buyer to dynamically review its risk exposure on a quarterly basis. The trade used a standardised insurance contract similar to the one used in AkinovA’s first cyber trade in December 2019.

The purchaser was represented on the marketplace by Guy Carpenter, while Hiscox was instrumental in developing and structuring the security, and providing capital for the transaction.

PCS, a Verisk business, will report on the named perils of the contract as originally reported by the cloud service provider.