Beazley closes $140m 144A cyber catastrophe bond
Specialist re/insurer Beazley has closed its first 144A cyber catastrophe bond providing cover of $140 million.
The company said this is its inaugural 144A bond and builds on its pioneering $81.5 million cyber catastrophe bond programme of 2023.
PoleStar Re is a Series 2024-1 Class A note designed to cover remote probability catastrophic and systemic events. Structured on an indemnity trigger and per-occurrence basis, the bond runs for a two-year term through the end of 2025.
144A catastrophe bonds are more liquid forms of bonds than those raised solely through private placements, meaning they are easier to trade.
Beazley has concentrated on cyber re/insurance in the conventional and alternative markets.
“Developing a dynamic cyber market and effective solutions for catastrophe risk is vital to increasing the supply of capacity to the cyber re/insurance market to meet growing demand for cover from business and society,” the company said.
Paul Bantick, global head of cyber risks, Beazley, said: “The cyber market is predicted to treble in size over the next four years. To get there we must keep evolving as a market to ensure we can provide cover for catastrophic events as demand and risk grows. Catastrophe bonds and the ILS market are vital to this.
“Investor interest in our issuance has been strong and their support is testament to the confidence they have in our ability to effectively manage cyber risk. Building on the success of the market’s first cyber catastrophe bond programme in 2023, we expect to continue scaling our presence in the cyber insurance linked securities market, encouraging others to do the same.”
The bonds were listed on the Bermuda Stock Exchange on December 20, 2023.
Gallagher Securities was the sole structuring and book building agent. Risk modelling was provided by Moody’s RMS and a second view of risk by CyberCube. Mayer Brown served as the deal counsel on the transaction.
In November 2023, AXIS Capital closed the first 144A cyber catastrophe bond, raising $75 million to provide several of its subsidiaries with fully collateralized indemnity reinsurance protection for systemic cyber events on a per occurrence basis.
In January 2023, Beazley launched a $45 million private Section 4(2) bond which gave Beazley indemnity against all perils in excess of a $300 million catastrophe event, with the potential for additional tranches to be released through 2023 and beyond.
