Hiscox creates new cyber platform
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Global insurer Hiscox has continued its focus on cyber with the launch of a new cyber industry loss warranty (ILW).
According to the company the ILW responds to an aggregation of cyber losses throughout the year and helps address the uncertainty around cyber tail risk for (re)insurers and can therefore act as an effective hedging mechanism for cyber underwriters.
Hiscox claims that while ILWs are common within the property reinsurance and retro markets, this is the first that responds specifically to cyber losses.
Products like ILWs allow an organisation to take out coverage based on the total insured industry loss, rather than the losses of a specific insurer. With ILWs, a third party is required to be an objective decision-maker on the size of the market loss, which in this case is the PCS Global Cyber Index.
“We have big ambitions in cyber and our new cyber ILW is another important step forward in developing that market,” explained Mike Krefta, Hiscox Re & ILS chief executive officer. “We believe innovations like this demonstrate our technical abilities and willingness to be a market leader in emerging risks.”
The company said that the cyber ILW is part of its ongoing drive towards product innovation and bespoke client solutions. Other examples include FloodXtra, which Hiscox launched at the end of last year to provide reinsurance protection to US insurers in a deregulating flood insurance market, and FloodPlus, its London Market insurance product for US coverholders.
Hiscox, ILW, cyber, industry, loss, warranty, underwriters