Beazley partnered with Integral ILS on new cyber ILS fund platform in Bermuda

Artemis has learned that Beazley, the London headquartered specialty insurance and reinsurance company, has partnered with specialist insurance-linked securities investment manager Integral ILS Ltd. to establish the awaited cyber ILS fund operation in Bermuda.

We’d reported before that, when it comes to cyber insurance-linked securities, Beazley was planning a transition into securitisation and transformation of risks for third-party investors, with launch of a dedicated cyber ILS fund also planned for later this year.

Previously, Beazley’s CEO Adrian Cox had said that the firm’s plans to broaden into cyber insurance-linked securities (ILS) through its recently established Bermuda branch, included a joint-venture with an unnamed established ILS market player with a platform on the island.

Those plans are moving forwards and appear advanced, as we can now report that the specialist investment manager partnered with Beazley is Integral ILS Ltd.

Integral ILS Ltd. was launched by experienced ILS market executives Richard Lowther and Lixin Zeng back in 2020, since when the company has expanded to manage over US $3.5 billion in third-party investor capital as of this year.

Natural catastrophe risk has been the main focus for Integral ILS since its launch. So this partnership with Beazley sees its first confirmed move into a specialty line of reinsurance business focused strategy, as it looks to broaden the range of investment options it offers to institutional investors.

Integral ILS will be the portfolio and investment manager for this cyber ILS fund that is in the works, while Beazley will be the originator and source of the underwritten risk from within its expansive global cyber book.

Adrian Cox, CEO of Beazley, explained to Artemis, “Our partnership with Integral brings together our market leading cyber underwriting expertise with their highly regarded ILS asset management capabilities. As leaders in the cyber market, we have long believed that developing a vibrant cyber ILS market is vital to meet future demand for cyber insurance. At the same time, it will also create an opportunity for specialist investors to participate in an exciting alternative asset class. Integral share our approach that specialisation combined with effective use of data can support disciplined underwriting and promote long-term performance and I am pleased to be working with them.”

The cyber ILS operations and this partnership with Integral ILS form the latest expansion of Beazley’s ambitions under its Bermuda operations, as the company has fully-embraced the opportunities that the island’s marketplace presents.

“Our partnership with Integral is yet another example of the momentum we’ve been building since opening in Bermuda earlier this year. Our Property Treaty underwriting has so far exceeded our initial targets, our parametric team will be onshore later this summer and we will be adding further ART and Mortgage Indemnity underwriting capabilities in the second half of the year,” Beazley CEO Cox further explained to us.

We understand that a number of entities have already been registered to serve as vehicles for underwriting, transformation, management and offering of investment opportunities, to investors seeking to access the returns of cyber insurance and reinsurance underwriting through this partnership.

We’re told these include a holding entity for the cyber ILS platform, a reinsurer presumably to act as an underwriting vehicle and risk transformer, as well as a cyber ILS fund structure, which speaks for itself.

The coming launch of this cyber ILS platform underscores Beazley’s strategy to continue expanding its work with third-party capital investors in cyber underwriting and cyber risks, and Integral ILS’ desire to offer new and complementary strategies to its growing investor base.

Richard Lowther, Managing Partner, Integral ILS, told us that, “At Integral, our focus is on developing specialist ILS strategies for our investors. This partnership combines Integral’s ILS investment management capabilities with Beazley’s extensive cyber underwriting expertise to develop a dedicated cyber ILS strategy.”

Lixin Zeng PhD, Managing Partner Integral ILS, added, “We believe cyber has the potential to become an important part of the broader ILS market over time, and we are pleased to be working with Adrian and the Beazley team to develop this opportunity.”

Of course, Beazley is already well-known in the cyber ILS space, as one of the leading underwriters of cyber insurance and reinsurance in the world and having called early on for capital markets participation, as well as being the most active sponsor of cyber catastrophe bonds under its Polestar Re program.

Through this new cyber ILS platform, Beazley’s cyber risk underwriting expertise will be harnessed to originate opportunities for the investors into a dedicated cyber ILS fund, that is managed by the Integral ILS team.

This will be a high-profile launch of what could become the first dedicated cyber ILS fund strategy. We understand there have been some bespoke, small and likely privately mandated cyber ILS investment structures to-date, as well as the cat bond activity and some private ILS arrangements.

But nothing has come to market that offers a multi-investor, fund-like investment opportunity in cyber risk at any scale so far. So this partnership could become the first, when the strategy launches.

Remember late 2026 had been mentioned as a target by Beazley before, so we may not have long to wait.