Cyber cat bond modeller CyberCube gets $180m investment from Spectrum Equity

CyberCube, a specialist modelling firm for cyber risks and exposures that has also been the third-party modelling agent for a number of the cyber catastrophe bonds that have been issued so far, has announced a significant more than $180 million investment in the company to support its long-term growth ambitions.

An investment of more than $180 million is expected to be made by Spectrum Equity, subject to customary regulatory approvals, with that firm set to join existing investors ForgePoint Capital, Hudson Structured Capital Management (Bermuda) Ltd. (the investment manager founded by Michael Millette that also offers ILS and reinsurance opportunities), and MTech Capital, as another cornerstone backer of CyberCube.

CyberCube’s Portfolio Manager risk model has been used for a number of cyber catastrophe bonds, including the landmark first private cyber cat bond deal sponsored by re/insurer Beazley in 2023.

CyberCube was also the third-party risk modelling agent for the first full 144A cyber catastrophe bond, the Long Walk Re deal sponsored by AXIS Capital in late 2023.

As a result, the company has cemented its place as a key provider of risk modelling and analytics to those in the insurance-linked securities (ILS) market that invest in cyber risk opportunities, as well as to sponsors of cyber cat bonds.

For the cyber cat bond and ILS market to continue developing and reach its potential, the evolution of cyber risk modelling capabilities is going to be critical, not least to help more of the ILS investor-base get comfortable with allocating capital to cyber insurance-linked securities.

As a result, such a large investment bodes well for CyberCube’s risk model to continue its development at pace and this should also drive growing interest from capital in the cyber opportunity as well, which in time may also bring other vendor solutions to market, keeping the ecosystem healthy with competition.

The new and significant capital injection from Spectrum Equity is expected to, “Fuel the long-term development of CyberCube’s cutting-edge products and solutions to quantify cyber risk while accelerating go-to-market expansion in the global insurance, reinsurance, and broking industry. With this new investment, CyberCube can deliver more impact, at scale, across the insurance value chain and beyond to organizations and society in the years to come,” the company stated.

Pascal Millaire, CyberCube CEO, commented on the news, “Cyber has the potential to become one of the largest lines of Property and Casualty insurance, as internet-connected technologies and artificial intelligence transform all corners of the global economy. With the additional capital from Spectrum Equity, CyberCube is even better positioned to deliver the analytic tools our insurance clients need to sustainably grow into the 2030s.”

CyberCube has named Scott G. Stephenson, former Chairman, President, and CEO of Verisk, as its new Chairman of the Board of Directors. He has held a seat on CyberCube’s Board since 2022.

“I am confident in the long-term growth of the cyber insurance sector and recognize in CyberCube’s mission the need for robust analytics tools to support this growth and assist cyber risk decision-making. As CyberCube scales the value it is driving for organizations and society, I’m excited to take a more prominent role in charting CyberCube’s course to success in this endeavor,” Stephenson explained.

Mike Farrell, Spectrum Equity Managing Director, added, “CyberCube is a market-leading company that is transforming the way the insurance sector trades cyber risk. We’re excited to support the company and its management in expanding its product set and global reach in one of the most strategic growth areas for the insurance industry.”

You can read about every cyber cat bond transaction, including the first private cat bond deals and the more recent 144A cyber cat bonds, by filtering our Deal Directory by peril to view only cyber cat bond transactions.