London-based specialty insurer and reinsurer, Beazley, is set to follow up on its three private transactions with its first full 144a cyber catastrophe bond issuance by the end of the year, according to Artemis sources.
Our insurance-linked securities (ILS) focused sister site, Artemis, reported earlier today that Beazley is close to launching its 144a cyber cat bond.
The re/insurer was the first to issue a private cyber cat bond, the $45 million Cairney transaction back in January, which was followed by a $20 million deal in May and a $16.5 million issuance in September.
The combined $81.5 million of cyber reinsurance that Beazley secured via these three deals is scheduled to mature at the end of the year, and the new, full 144a cyber cat bond is expected to be issued by year-end to tie in with these maturities, and the firm’s cyber reinsurance renewal in January 2024.
According to Artemis, Beazley is at an advanced stage of planning the new transaction, and it’s expected to at least entirely replace the existing coverage provided by the three private deals, with sources suggesting that the issuance could be sized at around $100 million, potentially more.
Artemis also reports that Beazley is working with catastrophe risk modeller RMS as the third-party modelling agency for its 144a cyber cat bond.
The three private Cairney deals are all structured on an indemnity basis, and it’s understood that this will be the same approach for the 144a issuance.
News of Beazley’s first full 144a cyber cat bond comes hot on the heels of Long Walk Reinsurance Ltd. (Series 2023-1), the $75 million 144a cyber cat bond sponsored by Bermuda-based re/insurer AXIS Capital Holdings, which is still marketing and set to complete in November.
The ILS market’s role in the growing cyber insurance and reinsurance sector has been a hot topic for some time now, given the need for more and different sources of capacity to address the exposures. So, it’s promising to see that after three private deals in the first nine months of 2023, the year looks set to end with two full 144a cyber cat bonds in the market.
You can read about all of the cyber cat bonds covered on Artemis, including Beazley’s three Cairney deals and the new 144a Long Walk Re cyber cat bond from AXIS, by filtering the Artemis Deal Directory by peril to view only cyber cat bond transactions.
