Hannover Re Renews Cloud Outage Catastrophe Bond, Structured by Parametrix

Hannover Re has renewed a cyber catastrophe bond that provides $20 million worth of retrocessional protection against the accumulation of losses caused by a sustained cloud-outage event during 2025-2026.

Cumulus Re II is 45% larger than the first iteration of the Cumulus Re cat bond, which was not drawn down in its first year, explained Parametrix, the New York City-based cloud monitoring, modeling, and insurance services firm. Parametrix developed the structuring, issue, price and placement for Cumulus Re II.

“It is satisfying to see a successful risk transfer experiment from 2024 transformed into a larger, routine transaction in 2025. I am grateful to Parametrix, whose expertise and technology have made possible this advance in 21st-century technology risk transfer,” commented Henning Ludolphs, managing director, Retrocession & Capital Markets at Hannover Re, in a statement.

“The enlarged transaction shows how comprehensive cloud monitoring and loss modeling by Parametrix continues to build confidence in systemic cyber risk assessment,” said Parametrix, which has tracked and audited more than 2,600 historical cloud outage events and collected more than 260 billion cloud performance and availability data points.

This dataset provides a global view into the performance and availability of the three largest public cloud service providers, Amazon Web Services, Microsoft Azure, and Google Cloud Platform, explained Parametrix which modeled Hannover Re’s underlying risk portfolio.

“We have shown again that portfolio accumulation of cloud outage losses is a risk that can be tamed,” said Sharon Haran, managing director of Parametrix Analytics, the company’s dedicated analytics arm, which serves as the calculation agent for the bond.

“We are pleased to have worked with Hannover Re to get this second, larger bond over the line, and to have delivered a tool which gives bond buyers a real-time understanding of the digital performance they have covered,” Haran said.

This year, Cumulus Re bondholders will gain exclusive access to a dedicated dashboard, providing a real-time view of the status of relevant cloud regions, enhancing visibility and confidence in the performance of this emerging risk, Parametrix Analytics said.

About Parametrix

Parametrix is a managing general agent and Lloyd’s coverholder that underwrites parametric insurance against digital supply chain interruption. Parametrix uses proprietary technology to monitor the performance of a variety of third-party IT services across the globe and collect granular data on service interruptions. This data is used to assess risk, provide instant insurance quotations, and to streamline claims payments, which are delivered within days. Parametrix policies are backed by major A-rated global insurers.

Source: Parametrix

Topics
Catastrophe