Man Group Sees Cyber Risk as ‘Peak Peril’ in Cat-Bond Market (1)

Cyber risk is growing fast enough that it will eventually become a “peak peril” and a much larger component of the growing market for catastrophe bonds, according to Man Group Plc, the world’s largest publicly traded hedge fund manager.

Catastrophe bonds, which transfer hard-to-insure risks to capital-market investors, have long focused on hurricanes and earthquakes, known as peak perils because of the large losses they cause. But as traditional reinsurance struggles to meet the demand for protection against severe cyberattacks and systemwide computer failures, cat bonds may help close the gap, Man Group said.

“We see opportunity for ...