Lockton Re Launches ILW for Property Cyber Risks
Lockton Re has placed what it says is the first industry‑loss warranty (ILW) that merges property catastrophe and cyber risk triggers into a single limit for a protection‑buying client.
Structure and partners
The arrangement relies on a trigger from PERILS AG and uses CyberAcuView as the index provider for the cyber component. For the property side, the industry index comes from Verisk’s PCS. By combining these two sources, the ILW offers a single‑limit cover that addresses both perils under one contract.
Lockton Re noted that the move reflects a broader shift in the ILW market, which has traditionally focused on property‑only triggers. The firm added that the cyber ILW and industry‑loss index trigger sector are reaching a level of maturity that allows such hybrid products.
Client rationale
According to the broker, global cedents are seeking efficient ways to derisk, especially as U.S. cyber exposure grows. A multi‑peril limit that uses industry‑loss triggers can simplify risk management by bundling coverage that would otherwise require separate contracts.
Tom Parcell, chief broking officer at the Bermuda office, said the deal reflects a focus on innovation that supports clients and builds on the breadth of products that can be traded in the market.
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He noted rising demand for “new structures and integrated options” and expressed optimism about growth in bespoke, alternative index covers.
The firm’s international ILS and cyber ILS leader, Theo Norris, observed that the deal highlights trends with the convergence of property catastrophe and cyber risk transfer, the growing maturity of industry cyber loss indices, and the development of new capital solutions for the market.
He added that internal organization enables rapid adaptation to client needs.
Lockton Re expects further hybrid ILW structures to emerge, aiming to meet client demand for combined coverage. As the cyber industry‑loss reporting space evolves, more hybrid collateralised reinsurance and catastrophe‑bond structures are likely.
While the broker did not disclose which markets supplied capital for the dual‑peril ILW, it indicated that the instruments would attract insurance‑linked securities funds and ILS investment managers.
