Parametrix supports Hannover Re’s renewal of $20m Cumulus Re cloud outage cat bond

Hannover Re, one of Europe’s big four reinsurers, with the support of Parametrix, has secured $20 million of retrocessional protection for losses caused by a sustained cloud outage event, with this second catastrophe bond transaction 45% larger than the inaugural deal.

Cumulus Re II, or Cumulus Re (Series 2025-1) as its listed on our insurance-linked securities (ILS) focused sister site, Artemis’ extensive Deal Directory, is a renewal of the $13.75 million Hannover Re sponsored Cumulus Re (Series 2024-1) cat bond, which it’s been reported was not drawn down in its first year.

Parametrix, a provider of digital business interruption risk analytics and solutions, has announced the structuring, issue, and placement of this innovative, privately placed cat bond.

The company says that this second and larger cloud outage transaction attracted more investors, enabling Hannover Re to obtain $20 million of protection for 2025-2026 against the accumulation of losses as a result of a sustained cloud outage event, an underserved area of the cyber risk transfer space.

To both structure and price the cat bond, Parametrix used its comprehensive dataset to model the reinsurer’s underlying risk portfolio, with Parametrix Analytics serving as the calculation agent. According to the firm, bondholders will have access to a dedicated dashboard this time around, which provides a real-time view of the status of relevant cloud regions.

Cyber risk made its way into the cat bond market in 2023, first with some small private deals, before numerous full 144A cyber cat bonds came to market, although only the two Cumulus Re deals sponsored by Hannover Re cover cloud outage risks.

For some time, industry commentary suggested that the ILS sector has a role to play in the cyber risk world, but the ability to accurately model and fully understand the risks, especially around accumulations, was seen as a hindrance.

Clearly, though, investors have gained confidence with the peril and its modelling, and as noted by Parametrix, this larger transaction shows how “comprehensive cloud monitoring and loss modeling” can build confidence in the assessment of systemic cyber risk.

In fact, Parametrix states that it has tracked and audited over 2,600 historical cloud outage events, and collected over 260 billion cloud performance and availability data points. This dataset provides a global view into both the performance and availability of Amazon Web Services, Microsoft Azure, and Google Cloud Platform, the three largest public cloud service providers in the world.

You can read all about this latest Cumulus Re transaction and all other cyber cat bonds on the Artemis Deal Directory, which can be filtered by peril to view just the cyber risk deals.

“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,” said Henning Ludolphs, Managing Director, Retrocession & Capital Markets at Hannover Re.

Sharon Haran, Managing Director of Parametrix Analytics, added: “We have shown again that portfolio accumulation of cloud outage losses is a risk that can be tamed. 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.”

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