While ample traditional reinsurance capacity is keeping the cyber ILS market limited for now, the underlying risk modeling and investor confidence in the asset class continues to grow. According to a new report from rating agency S&P, these evolving capabilities are laying the groundwork for alternative capital, which could play a much larger role should traditional reinsurance capacity constraints emerge in the future.
In a recent report, the rating agency notes that cyber capital market activity has subdued in 2026, with only one new cyber catastrophe bond issued so far this year.
Back in March, German reinsurer Hannover Re sponsored a second successful renewal of its landmark parametric cloud outage catastrophe bond, securing $35 million in retrocessional cyber reinsurance protection covering cloud outage events with a Cumulus Re (Series 2026-1) issuance.
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