Insurance firms Beazley and RenaissanceRe have collaborated to launch a reinsurance product that offers cyber catastrophe cover backed by capital markets.

Majority of the security aspects behind the deal will be provided by capital sources structured global insurer RenaissanceRe.

With the placement of cyber catastrophe risk into the capital markets, larger source of capital opens up to support Beazley’s cyber offering that currently more than the levels offered by the traditional reinsurance market.

This is claimed to be one the first cyber catastrophe insurance solutions that is supported by capital markets.

Beazley chief underwriting officer Adrian Cox said: “As the scale of the cyber threat to businesses continues to intensify, the challenge to the insurance industry is to ensure we continue to provide cover that responds as the risk evolves and capacity that is commensurate to the size of the risk. We are delighted to partner with RenaissanceRe to deliver valued cyber cover to our growing client base whilst managing accumulations of risk within the group’s tolerances.”

RenaissanceRe’s chief underwriting officer for casualty & specialty David Marra said: “We are pleased to partner with Beazley to provide a solution to businesses seeking higher levels of cyber insurance cover. Our ability to address the emerging challenges of the market by structuring attractive opportunities for investors is a hallmark of RenaissanceRe’s creative approach to risk selection, capital management and client service.”

Beazley is the parent company of specialist insurance businesses and has operations in Europe, US, Canada, Latin America and Asia.

It manages seven Lloyd’s syndicates. Last year, it underwrote gross premiums of $2.6bn worldwide.

RenaissanceRe is a provider of reinsurance and insurance. It offers property, casualty, and specialty reinsurance and certain insurance solutions to customers, through intermediaries.

It has offices in  Ireland, Singapore, Bermuda, Switzerland, the UK and the US.