Captives

Captive Solutions

USE QUANTAR FOR YOUR CYBER CAPTIVE FORMATION

• Avoid Cyber Cover Limits and Pricing

  Although cyber risk policies are readily available in today’s commercial market, but have unanticipated exclusions or coverage gaps. A captive can provide the solution for cyber risk protection.

  Using your captive for building a statistical base in conjunction with our patented technology can make securing excess coverage at acceptable terms and pricing easier. This may extend to covers for future lost revenue, or first party loss of inventory due to technology failure.

  The complexity of cyber risk makes the benefits of retaining cyber via your captive, gaining a better understanding of the losses and expenses, having greater cyber risk oversight, and potentially reducing the overall cost of cyber risk a logical strategy. Use your captive for strategic layers of cyber exposure, both now and in the future.

  Where your captive moves into cyber cover, it is necessary to understand the underlying exposure, what could qualify as a claim and how your captive may be able to mitigate cyber risk with your reinsurers. Quantar can provide your captive with insight into the operational, financial and security risks posed to your organization to facilitate cyber cover or transfer.

• Coverage Arbitrage

  With regards to cyber risk, there is usually a need for a tailor-made program, with wordings to meet specific requirements, or expectations. Use your captive for proportional reinsurance to cover cyber risks.

  Avoiding having to accept certain wording exclusions for retrocessionaires to be willing to cover the cyber risks behind your captive with a limitation of coverages, alternative structures and private transactions within the ILS market can be leveraged.

  Using Quantar’s CyCalc Suite can provide the cyber risk data required by the ILS market can assist your captive in choosing the optimal cyber cover retention level – a prerequisite for efficient allocation of scarce capital and minimise the total cost of cyber risk.

• Captive Structures

  Enable your captive to implement innovative structures to get the most out of their presence using our patented technology to provide the critical data required for index-linked parametric products for cyber cover.

  Protection is triggered by specified measurements meeting a threshold, set through implementation and use of Quantar’s cyber risk valuation solutions. This form of cyber cover is attractive to ILS investors due to the granular parametric form of protection for a corporate or captive.

  Solutions include involving alternative risk financing, aggregate stop loss and multi-line, multi-year programs.

  Your captive can utilise alternative risk financing to enable a more efficient mechanism through which to write cyber risks.

  Develop cyber risk transfer pricing to account for worst case cyber risk scenarios using our patented CyCalc Suite. Use retrocession to distribute the basis risk with your reinsurers and receive experience credits if cyber loss does not occur, optimizing captive efficiency.

• Your Captive and the ILS Market
  

  The question for captives is how to finance the financial risk exposure arising from cyber. The capital needed to cover cyber liability is probably best found in the ILS capital market.

  ILS has begun to expand its scope in the risks being underwritten. The development of ILS cyber is still in development due to the lack of loss data and lack of underwriting expertise for investment in cyber ILS to be made confidently. Quantar can assist in the development of an ILS program for your captive through the provision of ongoing risk data, cyber risk analytics and cyber risk modelling.

  The key to ILS appeal is that it provides investors with an attractive, decorrelated risk-return profile. Simultaneously, your captive, as the cedant, is accessing an alternative form of risk transfer capacity above that provided by the reinsurance market for cyber.

  Our technology increases confidence in underwriting cyber covers, driving diversification into new risk layers, regions and lines, expanding to plug gaps in cyber coverage.

  ILS is well-suited to providing much-needed protection against systemic cyber risk but requires quantification and valuation through Quantar’s patents quantitative assessment and modelling, in the absence of detailed loss history. Use Quantar to create, control and enhance your captive’s cyber coverage programs.

• Corporate ILS Using A Captive

  Your captive provides corporate access to the ILS capital market, bypassing expensive or limited supplies of cyber cover. Using a private, bi-lateral trade via your captive, using cells provides a unique solution to providing corporate cyber cover.

  Use Quantar’s CyCalc Suite to create granular parametric protection requirements for private corporate ILS placement.

  Your captive’s access to ILS can be used to complement insurance buying so that when cover capacity is constrained, it is possible to go to the ILS market – fast.

• Quantar Captive Cyber Risk Analytics

  Using our cyber risk valuation analytics solutions delivers three clear benefits to your captive:

  1. To enable evaluation of factors such as Solvency II capital adequacy through surplus ratios;
  2. To facilitate stress testing of the types of cyber losses your captive can absorb over varying time frames, volumes and severity.
  3. To identify trends in cyber causation and other factors, providing more efficient targeting of cyber risk mitigation spend driving costs down.

  Move away from guaranteed cost programs, to significant captive cyber risk retentions and use our technology to gather and analyse cyber risk data.

  Cyber risk has no long history of commercial placement into captives, so it may be used as a risk management and risk financing tool to collect cyber risk data in conjunction with Quantar’s patented technologies.

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