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Lockton Re executes ILW linking property cat and cyber triggers

The reinsurance broker used a PERILS AG trigger for the cyber and PCS index for property cat exposure in a single limit structure.

Reported · Written up by our desk · Reinsurance

Lockton Re has executed an industry-loss warranty, or ILW, that combines property catastrophe and cyber risk triggers within one limit structure for a protection buying client, the firm said. The broker described the transaction as the first of its kind in the market that brings the two risk categories together in a unified ILW design.

Lockton Re said it used an ILW trigger from PERILS AG for the cyber component, with CyberAcuView as the cyber index provider. For the covered property catastrophe exposure, Verisk’s PCS supplied the industry index used for the property cat trigger.

The deal is positioned as another step in the ILW market’s evolution beyond traditional property-only use cases, with Lockton Re citing increased maturity of cyber ILW and industry-loss index triggers. The broker said the structure is aimed at helping global cedents derisk efficiently, including amid growing US cyber exposures.

Lockton Re said it expects further developments in hybrid ILW structures that can address the needs of clients looking for integrated hedging solutions across catastrophe and specialty lines. The firm added that it is seeing convergence between property catastrophe and cyber risk transfer, along with broader demand for risk solutions using new structures and integrated options.

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