Insurer AXIS Capital has closed the market’s first 144A cyber catastrophe bond, a US$75 million transaction. It provides several of the company’s subsidiaries with fully collateralised indemnity reinsurance protection for systemic cyber events on a per occurrence basis.
Bermuda-based special purpose insurer Long Walk Reinsurance issued US$75 million of Series 2024-1 Class A notes, maturing January 2026, to investors to support the reinsurance agreement with AXIS.
This is the first issuance of notes for Long Walk Reinsurance covering the AXIS insurance and reinsurance companies, including its Lloyd’s syndicate AXIS' Syndicate 1686.
The Long Walk catastrophe bond transaction was structured and distributed to investors by Aon Securities. Risk analysis was provided by CyberCube’s portfolio manager platform.
Peter Vogt, chief financial officer at AXIS, says: “We expect Long Walk to provide support for the growth of our cyber insurance portfolio in the future.
“More broadly, we expect this transaction will serve as a template that the catastrophe bond market will use to support the availability of cyber insurance capacity in the years to come.”
Richard Pennay, CEO of insurance-linked securities at Aon Securities, adds: “This is a notable catastrophe bond transaction, not just for the insurance-linked securities market, but also for the global cyber insurance market.
“It received broad investor support, and illustrated the catastrophe bond investors’ ability to work with AXIS to pioneer a product that provides meaningful catastrophe-based cyber protection.”
