Gallagher Re, a reinsurance broker, anticipates a surge in investments in cyber catastrophe bonds in 2024, following the successful launch of PoleStar Re Ltd. (Series 2024-1) in December 2023.
PoleStar Re was the first full 144A cyber catastrophe bond for specialty re/insurer Beazley. Gallagher Securities’ served as the sole structuring agent and bookrunner, with support from Gallagher Re’s cyber team.
This bond proved highly successful, with Beazley securing $140 million of cyber reinsurance from the capital markets.
Earlier in the year, Gallagher Re’s cyber team had pioneered the cyber catastrophe bond market in collaboration with Beazley, providing over $80 million in cyber reinsurance protection through three private cyber cat bonds (Cairney I, II, and III).
Therefore, the debut of this 144A cyber catastrophe bond effectively replaced the protection offered by the Cairney series.
Tom Wakefield, CEO of Gallagher Re, expresses confidence in continued investment in cyber catastrophe bonds, stating, “Our continued support of Beazley’s cyber capital expansion through PoleStar Re will further accelerate capital market investment in cyber more broadly.”
Wakefield adds, “We have now taken the next step into 144A bonds – but the journey does not end here. We remain dedicated to developing further Cyber ILS products for the capital benefit of our clients.”
As highlighted in Artemis, our insurance-linked securities (ILS) focused sister publication, the surge in investment in cyber catastrophe bonds may be influenced by Beazley’s significant role as a major writer of cyber re/insurance. As the demand for protection against cyber risks grows, Beazley stands poised to become a significant issuer of cyber cat bonds.
Given the success of PoleStar Re, Gallagher Re’s ongoing commitment to innovation, Beazley’s prominent position in the industry, and the growing market demand for cyber risk protection, the company is well-positioned to meet the expectations for more cyber catastrophe bonds this year.
To learn more about PoleStar Re, the Cairney series, and other catastrophe bonds, visit our Deal Directory on our ILS-focused sister publication, Artemis.
