Cyber catastrophe bond news

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 is back in the 144A catastrophe bond market and looking to extend its cyber reinsurance tower with the support of the capital markets, seeking a $75 million or larger PoleStar Re Ltd. (Series 2024-3) cyber catastrophe bond issuance, Artemis has learned.

New growth projections for the global cyber insurance market suggest a massive need for reinsurance and risk capital, of which the insurance-linked securities (ILS) market is expected to become a key source, according to CyberCube.

While the retrocession strategies of Europe’s Big Four reinsurance companies may differ, the still relatively new retro option of sponsoring cyber catastrophe bonds may prove to be an area of commonality between them.

Concerns over how a cyber catastrophe loss event could manifest mean many insurance-linked securities (ILS) investors remain cautious when it comes to considering allocating to cyber catastrophe bonds and reinsurance, but interest continues to rise and broker Lockton Re expects more efficient capital will flow to cyber risks in time.

The recent CrowdStrike related global IT outage event has shown that it is essential to have specialised knowledge about cyber risks in order to effectively invest in cyber catastrophe bonds, insurance-linked securities (ILS) and reinsurance focused asset manager Twelve Capital has said.

Specialist re/insurer Beazley said this morning that it aims to develop a “vibrant” cyber reinsurance market with the help of insurance-linked securities (ILS) investors, while also noting that the recent CrowdStrike IT outage has shown its cyber underwriting was resilient to such a loss event.

According to reinsurance broker Guy Carpenter, CrowdStrike is not a particularly significant cyber catastrophe event and only represents a “Kitty Cat”, or mid-sized catastrophe loss, while the broker estimates industry losses will be between $300 million and $1 billion.

Lockton Re, the reinsurance arm of the independent broking group, has hired Theo Norris from Gallagher Re to become its first Head of Cyber ILS.

Property Claim Services (PCS), the unit of Verisk that is a provider of industry loss estimates and loss data globally, has designated the recent CrowdStrike linked global IT outage as a PCS Cyber Catastrophe Loss Event, meaning industry insured losses are expected to reach above US $250 million, Artemis has learned.