This represents the company’s initial foray into the 144A bond market.
Beazley, a specialist insurer, has effectively concluded its inaugural 144A cyber disaster bond, obtaining $140 million in coverage. Beazley is entering the 144A bond market for the first time, after previously launching a cyber catastrophe bond programme worth $81.5 million in 2023.
The bond, named PoleStar Re Ltd Series 2024-1 Class A, is designed to offer insurance against rare catastrophic and systemic disasters. The structure of this is determined by an indemnification trigger and is established on a per-occurrence basis. The bond has a duration of two years, encompassing the period until the conclusion of 2025.
It is crucial to meet the increasing need for cyber (re)insurance coverage, which is coming from both enterprises and society as a whole. Beazley’s efforts to build the cyber market and implement effective techniques for managing catastrophic risks are essential in improving the availability of capacity in this field.
After the first triumph of the inaugural cyber disaster bond programme in 2023, Beazley intends to broaden its involvement in the cyber insurance-linked securities market and urges others to do the same.
Gallagher Securities served as the exclusive agent responsible for constructing and managing the book for this transaction. Moody’s RMS provided assistance in risk modelling, while CyberCube offered an additional perspective on risk assessment. Mayer Brown provided legal representation for the transaction.
Paul Bantick, the worldwide head of cyber hazards at Beazley, stated that the cyber market is expected to triple in size within the next four years. “In order to reach that point, it is imperative that we continue to progress and adapt as a market, so that we can effectively offer protection against catastrophic events, considering the increasing demand and risk.” Catastrophe bonds and the insurance-linked securities (ILS) market are crucial in this context. The substantial investor interest in our offering is evidence of their trust in our capacity to efficiently handle cyber risk. Based on the positive outcome of the initial cyber disaster bond programme in 2023, we anticipate expanding our involvement in the cyber insurance related securities market and promoting others to do so as well.
Furthermore, Beazley has just declared the selection of Patricia Kocsondy as the leader of worldwide cyber digital risks, commencing on January 1st.
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