Ariel Re, the global reinsurer with a Bermuda office, and Hiscox Re & ILS, the reinsurance and insurance linked securities arm of specialist global insurer Hiscox, have launched CyberShock, an industry-first cyber catastrophe consortium.

The CyberShock consortium is designed to offer up to $50 million of per-programme capacity providing tailored, event-based protection for cyber insurers worldwide.

Through this consortium, insurers will benefit from improved certainty of coverage for key cyber incidents including service supply chain events, cyber propagation events, hardware supply chain events, software supply chain events, and/or catalytic cyber events.

Daniel Carr, head of Cyber at Ariel Re, said: “Cyber catastrophe risk continues to be a major concern for the (insurance and) reinsurance market, with a lack of scaled, sustainable solutions for systemic risk holding back growth in the market.

“Ariel Re is an established market for property catastrophe risk and has taken a lead role in the development of Cyber Catastrophe reinsurance products in recent years – increasing our reach in this area made sense.

“We wanted to find another leading reinsurance market to support engagement and involvement across the wider market, and Hiscox Re & ILS was the perfect partner given their longstanding cyber expertise.”

Matthew Wilken, chief underwriting officer at Hiscox Re & ILS, added: “We are pleased to be partnering with Ariel Re, who share our goal to materially improve the existing market approach to cyber catastrophes.

“Against a backdrop of both a lack of clarity around cyber event definitions and meaningful capacity in the cyber reinsurance marketplace, we believe the CyberShock consortium can act as a positive catalyst for the market.”