CyberAcuView unveils loss index as Perils expands into the US for the first time

CyberAcuView and Perils have today unveiled a potentially major new cyber reinsurance initiative with the launch of a US cyber industry loss index that could ultimately attract more risk capital to the class and see reinsurers and capital markets investors trade cyber risk.

The launch comes after The Insurer revealed last month that the planned index was close to being unveiled.

The two entities today confirmed the initiative, which will report affirmative cyber market losses for $500mn+ events resulting from systemic cyber incidents which affect more than one insurer and more than one policyholder.

Loss estimates will be released at the latest six months after the event end date and will be updated quarterly for up to a maximum of three years.

The loss data, which will be collected from US cyber insurers, will then be available for licensing for risk transfer products such as ILS and industry loss warranty (ILW) contracts.

CyberAcuView was founded in 2021 by a consortium of leading US cyber insurers including AIG, Axis, Beazley, Chubb and Liberty Mutual and is led by former AIG European cyber head Mark Camillo.

Camillo told The Insurer the new index has the ultimate goal of attracting more capacity into the cyber market. While it will initially focus on the US market, over time he said the initiative will look to expand into other regions.

“This is an important initiative that will help increase the flow of capital into the cyber insurance market, and help insurers provide cyber coverage to a growing number of policyholders,” he said.

Camillo predicts the creation of the loss index will also accelerate the growth of cyber ILS and ILW markets.

The loss index will initially capture data from around 40 to 50 percent of the US cyber market.

Perils CEO Luzi Hitz commented: “I see many parallels to the property cat market. Modelling cyber is a huge challenge, with limited history to build reliable models. I believe we are at a similar stage [with cyber] to where we were with property cat following Hurricane Andrew in the 1990s.”

The initiative will also see Zurich-based Perils expand into the US for the first time. It provides an independent loss aggregation service similar to US rival PCS. The latter has been reporting on US catastrophes since 1949 and is now publicly listed through parent company Verisk. PCS launched a cyber index in 2017 although it is unclear how much traction it gained.