Beazley completes $140 million cyber catastrophe bond

Specialist insurer Beazley has successfully closed its first 144A cyber catastrophe bond, securing $140 million in coverage. This marks Beazley‘s first venture into the 144A bond market, following its earlier $81.5 million cyber catastrophe bond program launched in 2023.

The bond, issued under the name PoleStar Re Ltd Series 2024-1 Class A, is specifically crafted to provide coverage for catastrophic and systemic events with a low probability of occurrence. It is structured based on an indemnity trigger and is set on a per-occurrence basis. The bond has a two-year term, extending through to the end of 2025.

Addressing the growing demand for cyber (re)insurance coverage, both from businesses and the wider society, is critical, and Beazley’s development of the cyber market and effective strategies for handling catastrophe risks plays a key role in enhancing the availability of capacity in this area.

Following the success of the first cyber catastrophe bond program in 2023, Beazley aims to expand its role in the cyber insurance-linked securities market and encourages others to follow suit.

For this transaction, Gallagher Securities acted as the sole structuring and book building agent. Risk modelling support was provided by Moody’s RMS, with a second view of risk assessment by CyberCube. Mayer Brown served as the legal counsel for the deal.

“The cyber market is predicted to treble in size over the next four years,” said Paul Bantick, global head of cyber risks at Beazley. “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 program in 2023, we expect to continue scaling our presence in the cyber insurance linked securities market, encouraging others to do the same.”

What are your thoughts on this story? Please feel free to share your comments below.