The Reinsurance Daily

AM Best Assesses Cyber Cat Bond Premium, GC’s Klisura Weighs $6.7B Data Centre Risks, and Japan’s $550B U.S. Insurance Exposure

By The Reinsurance Daily Editorial ·

AM Best Assesses Cyber Cat Bond Premium, GC’s Klisura Weighs $6.7B Data Centre Risks, and Japan’s $550B U.S. Insurance Exposure

AM Best: Novelty Premium Remains in $1.235B Cyber Cat Bond Market

AM Best reports that the “novelty premium” attached to cyber catastrophe bonds has decreased since the market’s inception but has not disappeared entirely. The cyber cat bond market reached $1.235 billion in outstanding notional, up from $785 million previously, reflecting greater investor familiarity and competition. However, placement of new cyber ILS structures still attracts a risk premium above comparable natural catastrophe bonds. AM Best identifies the persistent complexities in cyber modeling and tail risks as barriers to parity. Acknowledging specialized coverage gaps, chief credit analyst Christopher Graham indicated,

“While investor understanding has improved, the unique challenges of the cyber class still command an additional margin for risk.”
The report points to continued, albeit reduced, opportunity for above-benchmark returns for sponsors willing to pioneer in cyber capacity.

SIFMA: $2B Casualty Sidecar/ILS Market Grows 10% as Structural Maturity Drives Investor Demand

SIFMA notes the casualty insurance-linked securities (ILS) and sidecar market expanded by $2 billion, crediting structural maturity and investor alignment as key drivers. The sector has seen year-on-year growth, with market capacity up 10% and investor allocations increasing an equivalent 10% to meet demand for uncorrelated risks. SIFMA stresses that further transparency and alignment between cedents and capital providers are elevating the credibility of the ILS format on casualty lines. Recent renewals reflect continued performance-based trigger structures, though deal terms indicate narrowing spreads relative to catastrophe ILS.

GC’s Klisura: Insurers Eye Third-Party Capital to Support $7.1B Data Centre Portfolio

Insurers are evaluating expanded use of third-party capital to underwrite growing data centre exposures. Guy Carpenter President and CEO Dean Klisura notes quoted limits for large corporate data centre programmes have surpassed $6.7 billion, with anticipated growth to $7.1 billion in 2026. The first quarter of 2026 saw syndication of over $2 billion in new quota share participations, helping carriers address peak exposure accumulations. Klisura says capital model pressure is driving interest in ILS-fashion structures for layered cyber and property covers, targeting risk transfer on higher occurrence or severity layers. The trend accompanies persistent cyber tail uncertainty and retro market capacity constraints.

Nationwide: U.S. Consumers Call for Insurance Solutions Covering Micromobility Vehicles

Nationwide has identified a growing demand among U.S. consumers for insurance products tailored to micromobility vehicles such as e-scooters and e-bikes. Nationwide’s latest survey suggests market reach could exceed tens of millions of vehicle exposures, with use metrics for major metros showing annual growth above 7%. These findings point toward product development and underwriting innovation opportunities within personal lines and specialty insurers as urban mobility dynamics evolve.

Japan's $550B U.S. Insurance Market Bet Raises Strategic Capital Allocation Questions

As of 2026, Japanese insurers’ investments in the U.S. insurance sector total $550 billion, making Japan a dominant foreign capital provider in the American market. This level of commitment represents over 10% of total foreign insurance sector assets in the U.S., leading to substantial influence over pricing power and capital flows. Strategic allocation reviews and asset liability management are heightened as global rate environments and regulatory shifts affect overseas capital returns and surplus deployment.

Ukraine: Sanctioned Russian Oil Vessels Using Counterfeit Coverages

Ukrainian authorities allege that Russian oil carriers under sanctions are operating with fake insurance documentation to bypass international restrictions. The reported activity encompasses at least dozens of vessels and possibly up to $200 million in questionable policy values, raising concerns among legitimate providers regarding identification, coverage verification, and regulatory exposure. There are calls from Ukraine’s government and international organizations for increased scrutiny of marine insurance certificates issued to sanctioned fleets.

EIOPA: Supervisory Priorities in the €14T EU Insurance Market

The European Insurance and Occupational Pensions Authority (EIOPA) continues to supervise a market representing approximately €14 trillion in assets. The Authority’s 2026 priorities include strengthening solvency oversight, improving sustainable finance disclosures, and increasing supervisors’ use of digital risk and AI model controls. With regulatory stress test participation now topping 250 undertakings annually, EIOPA emphasizes adherence to robust capital and reporting standards as the sector’s complexity intensifies.

Key Takeaways

Sources

Novelty premium in cyber cat bonds has reduced, but not completely ‘gone away’: AM Best — artemis.bm
Casualty sidecar / ILS market to expand. Alignment, maturity driving investor interest: SIFMA — artemis.bm
Insurers mull leveraging third-party capital to write more data centre business: GC’s Klisura — artemis.bm
Nationwide: Consumers Say Insurance Should Evolve for Micromobility Vehicles — insurancejournal.com
Viewpoint: Japan’s $550B Bet on America—What it Means for the US Insurance Market — insurancejournal.com
Sanctioned Russian Oil Ships Using Fake Insurance, Ukraine Says — insurancejournal.com
European Insurance and Occupational Pensions Authority — eiopa.europa.eu