Chubb opts to pursue first ever annual aggregate cyber catastrophe bond

International insurance and reinsurance giant Chubb has now opted to pursue annual aggregate cyber reinsurance from its new East Lane Re VII Ltd. (Series 2026-1) catastrophe bond, which will make this the first aggregate cyber cat bond in the market’s history, Artemis can report.

Chubb returned to the catastrophe bond market for its second cyber insurance-linked securities sponsorship earlier this month.

Initially, the company was targeting $150 million of cyber reinsurance protection, but two tranches of notes were initially offered to investors as Chubb sought feedback on either occurrence or annual aggregate protection.

Seemingly the feedback on what could become the first cyber catastrophe bond to provide annual aggregate protection was positive, as Chubb has now selected to pursue the issuance of the Class B notes, while the occurrence Class A tranche has been dropped from the offering, we are told.

Chubb’s target remains to secure $150 million or more in cyber reinsurance protection from this East Lane Re VIII Series 2026-1 cyber cat bond issuance, we understand, but it will all be in annual aggregate form.

The re/insurer has successfully tested the cat bond market’s appetite for cyber risk in annual aggregate form, so is now looking to benefit from a two year source of fully-collateralized, broad cyber reinsurance coverage, across two annual aggregate risk periods, through calendar year’s 2026 and 2027.

The $150 million Class B tranche of notes will provide Chubb annual aggregate cyber reinsurance protection from an attachment point of $600 million to an exhaustion point of $750 million, with a franchise deductible of $25 million to be cleared for a cyber loss event to qualify.

The Class B aggregate cyber cat bond notes will have an initial attachment probability of 1.86%, an initial expected loss of 1.57% and are still being offered to investors with the same price guidance as at their launch, for a risk interest spread ranging from 8.5% to 9.25%.

The move to test cat bond investor appetites for cyber aggregate reinsurance risk has proved to be a worthwhile one, which is positive for the market as aggregate cyber reinsurance has not been as readily available in the traditional market as some of the large underwriters of cyber risks had hoped to see, so if this deal gets successfully closed (which seems likely given the market at this time) it could bode well for future aggregate cyber cat bond issues to emerge.

This new cyber cat bond for Chubb will break new ground and introduce a level of diversification into cyber ILS that has not existed in 144A cat bond format before.

See details of every cyber catastrophe bond ever issued in the Artemis Deal Directory.

You can read all about this East Lane Re VII Ltd. (Series 2026-1) catastrophe bond from Chubb and every other cat bond issued in the Artemis Deal Directory.