As first reported by our insurance-linked securities (ILS) focused sister site, Artemis, Bermuda-based insurer and reinsurer AXIS Capital Holdings has sponsored the world’s first full 144a cyber catastrophe bond, a $75 million Long Walk Reinsurance Ltd. (Series 2023-1) transaction.
Artemis sources confirmed that this cyber cat bond will provide the company’s main underwriting subsidiaries, including its Lloyd’s syndicate and insurance and reinsurance companies, with reinsurance protection against systemic cyber events.
Long Walk Re 2023-1 provides coverage over a two year term, commencing from the start of 2024, and is structured on an indemnity trigger on a per-occurrence basis.
For AXIS’ and the market’s first 144a cyber cat bond, the re/insurer has established a new Bermuda based company named Long Walk Reinsurance Ltd. to become the special purpose insurer (SPI), which will issue a series of cyber cat bonds for AXIS.
It’s understood that the single tranche of Long Walk Re 2023-1 cyber cat bond notes will provide their reinsurance from an attachment point of $510 million and cover a share of losses across a $140 million layer of the firm’s cyber reinsurance tower.
Artemis reports that CyberCube is the risk modelling agency for this transaction, while Aon Securities is the sole structuring agent and bookrunner.
Currently, the deal is set to complete in November, but it is still marketing, so there’s also a chance the provisional $75 million size of Long Walk Re 2023-1 changes.
As shown by the Artemis Deal Directory, this isn’t the first time cyber reinsurance has been secured from the capital markets, but it is the first full 144a cyber cat bond.
The previous three deals, all from Beazley, were privately placed transactions.
Following the launch of the smaller, private cyber cat bonds, it was expected that a full 144a cyber cat bond would come to market. It will be interesting to see how it’s received by the ILS investor base, and whether AXIS’ deal is the first of many.
