Beazley targets more than doubling of PoleStar Re 2024-3 cyber cat bond to $200m

Beazley is aiming to more than double the size of its latest cyber catastrophe bond, with the PoleStar Re Ltd. (Series 2024-3) issuance now targeted to secure $200 million in reinsurance protection, Artemis has learned.

Beazley came back to market at the beginning of the month with what will be its third 144A cyber catastrophe bond sponsorship.

Beazley first sponsored a 144A cyber cat bond in December 2023, with the $140 million PoleStar Re 2024-1 deal. This was followed by a $160 million PoleStar Re Ltd. (Series 2024-2) issuance in May 2024.

Those first two PoleStar Re cyber cat bonds filled out a layer of Beazley’s cyber reinsurance tower from an attachment point of $500 million up to exhaustion at $800 million.

With this new PoleStar Re 2024-3 cyber cat bond, Beazley is looking to build out coverage on top of that, but the initial target size was just $75 million and now we’ve learned the deal is likely to upsize significantly to $200 million.

The coverage will be on an indemnity trigger and per-occurrence basis, like the first two cyber cat bonds and again it is designed to provide Beazley with a source of broad cyber reinsurance coverage from the capital markets, protecting it against major cyber loss events that impact its underwriting entities, including the syndicates at Lloyd’s and its US insurers.

This time, though, the attachment point for the PoleStar Re 2024-3 cyber cat bond notes is at $800 million, sitting atop of the first two issuances.

This latest Beazley cyber cat bond will span a much wider layer, with exhaustion set to be $1.2 billion. That suggested a maximum size of $400 million, but we’re now told it’s more likely the deal fills half the layer, at the updated target size of $200 million.

As we reported before, the notes will come with an initial attachment probability of 1.2%, an initial exhaustion probability of 0.7% and an initial expected loss of 0.93%.

At launch, the PoleStar Re 2024-3 cyber cat bond notes on offer came with price guidance in a range from 9.5% to 10.5%.

We’re now told the guidance has been updated at the top-end, of 10.5% at which level it would be a slightly higher multiple-at-market than the 2024-2 and 2024-3 notes paid investors.

Interestingly, we’re also told some new exclusionary language has been added to the deal, with any losses from the Crowdstrike failed software update explicitly excluded.

That’s interesting as Crowdstrike is seen as in the past by many in the industry. But it’s likely some investors demanded an exclusion anyway, given it could still constitute a live event of sorts.

It’s encouraging to see Beazley looking to upsize its latest cyber cat bond which will see the capital markets playing an even larger role for the firm’s cyber reinsurance needs.

You can read all about this PoleStar Re Ltd. (Series 2024-3)  catastrophe bond transaction to our Deal Directory, where you can analyse details of almost every cat bond ever issued and filter the list by peril to show only cyber cat bonds.