Cyber reinsurance
Cyber reinsurance transfers a portion of an insurer's cyber insurance risk, such as losses from data breaches, ransomware, and business interruption caused by cyber events, from the primary insurer to a reinsurer.
Cyber insurance protects businesses against costs tied to data breaches, ransomware, network outages, and related liability. Because a single event can affect many policyholders at once, primary insurers often cede part of this exposure to reinsurers. Cyber reinsurance can be structured on a proportional basis, where premiums and losses are shared by percentage, or on an excess of loss basis, where the reinsurer responds above a set retention.
This coverage matters because cyber losses can accumulate rapidly and correlate across many insureds, for example when a widely used software product or cloud service is compromised. Reinsurers help primary carriers manage that aggregation and systemic risk, though the market continues to refine how it models events that could hit thousands of policies simultaneously.
As an illustration, if a common software vulnerability triggers ransomware claims across a carrier's entire book in the same quarter, cyber reinsurance can absorb the losses that exceed the carrier's retained layer.
Cyber is a fast-evolving line, so it is a natural fit for an AI-native reinsurer such as RiskCube Re that supports MGAs and carriers underwriting emerging risks.
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Definitions are educational and general, and specific contracts, endorsements, and state rules may modify them. For regulatory guidance, refer to the NAIC or the Insurance Information Institute.