Gallagher Re, a reinsurance broker, anticipates a surge in investments in cyber catastrophe bonds in 2024, following the successful launch of Polestar Re Ltd. (Series 2024-1) in December 2023.
PoleStar Re was the first full 144A cyber catastrophe bond for specialty re/insurer Beazley. Gallagher Securities’ served as the sole structuring agent and bookrunner, with support from Gallagher Re’s cyber team.
A news report from Reinsurance News, an online industry-focused medium, on Wednesday indicated that the bond proved highly successful, with Beazley securing $140 million of cyber reinsurance from the capital markets.
According to the report, earlier in the year, Gallagher Re’s cyber team had pioneered the cyber catastrophe bond market in collaboration with Beazley, providing over $80 million in cyber reinsurance protection through three private cyber cat bonds (Cairney I, II, and III).
Therefore, the debut of this 144A cyber catastrophe bond effectively replaced the protection offered by the Cairney series.
Commenting on the bond issuance, CEO of Gallagher Re, Tom Wakefield, expressed confidence in continued investment in cyber catastrophe bonds in the year amid growing whirlwinds in the global economic space.
He said: “Our continued support of Beazley’s cyber capital expansion through PoleStar Re will further accelerate capital market investment in cyber more broadly.
Wakefield adds, “We have now taken the next step into 144A bonds – but the journey does not end here. We remain dedicated to developing further Cyber ILS products for the capital benefit of our clients”, the risk underwriter added
Ghalagher Re further stated that as highlighted in Artemis, its insurance-linked securities (ILS) focused sister publication, the surge in investment in cyber catastrophe bonds may be influenced by Beazley’s significant role as a major writer of cyber re/insurance.
In addition, it projected that as the demand for protection against cyber risks grows, Beazley remained strongly positioned to become a significant issuer of cyber cat bonds.
Given the success of PoleStar Re, Gallagher Re’s ongoing commitment to innovation, Beazley’s prominent position in the industry, and the growing market demand for cyber risk protection, the company is well-positioned to meet the expectations for more cyber catastrophe bonds this year.
