Gallagher Re has unveiled the Cyber Risk Adjusted Rating (RAR) Index, a new tool designed to monitor shifts in cyber reinsurance pricing in relation to risk.
The index aims to provide valuable insights into the evolving cyber risk landscape, with a particular focus on Aggregate Excess of Loss reinsurance pricing trends.
Ian Newman, the Global Head of Cyber at Gallagher Re, highlighted the growing and persistent nature of cyber risks, which remain vulnerable to systemic and catastrophic events. He stressed the importance of effectively priced non-proportional reinsurance solutions, underscoring the value of a dedicated index to track the cyber reinsurance market.
The Cyber RAR Index adjusts for anticipated changes in risk, incorporating key factors such as rate movements, loss trends, and catastrophe model selections.
Unlike property reinsurance, where limits are closely tied to the level of risk, cyber reinsurance requires a tailored approach to risk assessment in order to accurately reflect pricing changes.
Since their introduction in 2015, Aggregate Stop-Loss and Aggregate Excess of Loss structures have emerged as the preferred non-proportional reinsurance solutions for cyber risks.
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