Slide 1

Insurance-Linked Securities - Their Potential Role In Cyber And Other Insurance



Monday, 23 July 2018



14:00 to 14:45



Professor Michael Mainelli
Z/Yen Group

Sam Carter, Financial Sector Researcher and Quant Developer








Webinar Recording

Webinar Slides


Customers want coverage for their cyber-assets – be they data, software, hardware, or connectivity. The insurance industry has always been a rabid consumer of data. Where to get it? How to measure its reliability? And how to predict and price the future using the past? As the world becomes more connected through technology, and increasingly reliant upon it, exciting new areas for the insurance industry are opening up. However, insufficient data means that insurers are struggling with how to accurately measure the different attendant risks, and, crucially, to how to ensure that they will be able to cover losses in the event of a massive systemic cyber-catastrophe.

Insurance-linked securities (ILS) could play a vital role. If the risk borne by the re-insurance industry could instead be borne by the capital markets, it would allow insurers to underwrite cyber-policies with more confidence.  The appetite for ILS will be greatly improved by the introduction of clear and simple parametric/hybrid triggers, which will allow risk to be calculated and payments settled much more easily. This parametric approach lends itself naturally to a technological solution, currently being explored by Long Finance’s Distributed Futures project, sponsored by the Cardano Foundation.

As part of our research, we held a webinar to discuss ILS and their potential role in cyber and other insurance.  We covered the problems of data in cyber-insurance modelling, the appropriate structuring of ILS, the potential appetite for ILS investment, and the regulatory hurdles which may stand in the way of successful roll-out.

We would like to thank everyone who dialled in.  


  • Introduction
  • Presentation – Preliminary Approach
  • Discussion 
  • Concluding remarks
  • Next Steps