Cumulus Re (Series 2026-1)

This is the third catastrophe bond in the Cumulus Re series for Hannover Re and so the third ever to specifically cover cloud outage risks, an area of the cyber reinsurance market where availability of coverage has continued to be been seen as lacking on a retrocessional basis.

This Cumulus Re Series 2026-1 catastrophe bond has been privately placed by Hannover Re’s own Bermuda-based structure and segregated accounts company, Kaith Re Ltd.

Kaith Re Ltd. issued $35 million of Cumulus Re 2026-1 notes which have been privately placed with cat bond investors, so are cat bond lite notes.

It’s the second successful renewal of the Cumulus Re cloud outage cyber cat bond for Hannover Re and the largest yet.

Just like the first two Cumulus Re cloud outage cat bonds, this renewal for 2026 sees the cyber exposure risk being placed with investors on a private basis using Hannover Re’s Kaith Re Ltd. vehicle.

Hannover Re’s Bermuda-domiciled transformer vehicle Kaith Re Ltd. is the issuer for all of its privately placed catastrophe bond arrangements, for itself and for its clients.

We understand that, as in the first two Cumulus Re cloud outage cat bonds, the modelling of the cloud-related cyber exposure has again been undertaken by specialist provider of digital business interruption risk analytics and solutions Parametrix for this 2026 renewal issuance.

The 2026-1 issuance of Cumulus Re parametric cloud outage cyber cat bond notes is 75% larger than the soon to mature (April 14th) 2025 issuance.

For this second renewal, Kaith Re Ltd. has issued $35 million of Cumulus Re 2026-1 notes which have been privately placed with cat bond investors.

The first two Cumulus Re cloud outage cat bonds featured issuances of Reg 4(a)(2) zero coupon notes and we suspect this 2026 renewal is likely to be the same.

As with the previous two transactions, this new Cumulus Re 2026-1 cloud outage catastrophe bond features a parametric trigger, which is based on data related to outages of major US cloud provider regions and designed by specialist risk analytics provider Parametrix.

Parametrix will also again act as the ongoing calculation agent for the Cumulus Re renewal, monitoring for and reporting on the occurrence of any cloud outage events that could affect the notes.

The $35 million of Cumulus Re 2026-1 cat bond notes afford Hannover Re another single year of capital markets backed collateralized retrocessional cyber reinsurance protection, covering the risk of major cloud provider outages using a parametric trigger.

The maturity date remains the same as previous deals, being April 14th 2027 for this new issuance. We’re told the Cumulus Re 2026-1 cat bond notes were issued priced at 93% of par, so are again zero coupon notes.

We presume the coverage will closely mirror the previous Cumulus Re cat bonds. With those, Hannover Re received retrocessional protection that would trigger if the delivery of specific cloud services, in certain U.S. cloud regions, by one or more named cloud service providers, were interrupted in excess of a specified waiting period.

In addition our sources told us that the waiting period, so effectively the attachment metric for these notes, is the same as the previous issuances, so meaning a cloud outage event must be in effect for more than 24 hours.