Beazley

Several Lloyd’s syndicates are also now providing cover for the federal insurer.

Demand for top layer coverage may also need to be supported by underlying market growth.

The firm anticipates potential growth in cyber cat ILS similar to property cat ILS post-2005.

The venture will launch in early 2026 and include captives, ART, cyber ILS and specialty (re)insurance elements.

The average weighted spread on the deals was 651bps, skewed upward by cyber and wildfire deals.

The sponsor has $140mn of cyber cat bond protection maturing in December.

The renewal and upsizing of the Trouvaille E&S sidecar highlighted the market’s potential.

CEO Adrian Cox said Beazley’s recent $290mn ILW purchase was not driven by “capital flexibility in and of itself”.

The deal has reduced the carrier’s one-in-250-year cyber loss scenario from $651mn to $461mn.

Paul Bantick will continue to oversee the cyber risks division during the search for his successor.

The deal is offering a multiple of 11.3x on the expected loss.

The bond offers a multiple of 11.3x based on a modelled expected loss of 0.93%.

The bond is offering a spread range of 950-1,050 basis points.

The insurer currently has $300mn of reinsurance limit from cyber cat bonds.

The carrier estimates the total industry loss for the Microsoft/CrowdStrike outage at around $1bn-$2bn.

The analyst estimated Beazley’s loss from the global outage at $80mn-$120mn.

The current guidance is that Beazley will publish an undiscounted CoR in the low-80s at full year.

The 2024 winners were celebrated at The HAC in London on 27 June.

The partnership will add more capacity on the platform from April.

The deal will provide coverage for named storm and earthquake events in the US, Canada and parts of the Caribbean.

The transaction is the second cyber cat bond in 144A format to price and follows Axis’s Long Walk Re deal in November.

The carrier is seeking wind and quake coverage for Lloyd’s syndicates 623, 2623 and 3623, Beazley E&S Inc. and Beazley Insurance.

The 144A cyber cat bond deal has increased in size from an initial target of $75mn.

The pricing for the Class A notes has also adjusted to 1300bps.

The bond is being issued via the Lloyd’s London Bridge 2 PCC Limited structure.

PoleStar Re will provide worldwide coverage for any cyber event or series of cyber events.

The Smart Tracker Syndicate 5623 was established with the aim of delivering a ‘smart beta’ portfolio to investors.

A total of $386mn has been issued in private cat bond deals this year.

This came after the firm said it had begun the process of moving its US E&S business off its Lloyd’s paper as it sets up a new E&S carrier.

The carrier reported a 66% increase in GWP for its property business.

Guy Carpenter was the sole placing broker sourcing capacity for the tie-up.

The insurer said it received “significant investor interest in building out additional tranches” since launching the market’s first cyber bond in January.

Beazley executives spoke of further growth prospects in the class, after its results revealed a 79% combined ratio for its cyber division in 2022.

Beazley’s bond was hailed as a “great first step” but challenges remain, although others are already working on narrower cloud outage transactions.

Beazley’s $45mn first-time cyber cat bond offered all-perils coverage, though some expected early deals to start with limited scope.

The cat bond will pay out to Beazley if total claims arising from a cyber attack on its clients surpass $300mn.

Will Roscoe, who has managed the Smart Tracker since 2019, has been named active underwriter.

She succeeds William Mills, who left his role as group head of ceded re and third-party capital for Allianz.

The London-listed carrier said that market dislocation could last for years and had created a strategic opportunity for the carrier.

The reinsurance market next year will be a “challenging environment”, which Beazley expects to “shift significantly”, according to CEO Adrian Cox.

Business will be written directly into Syndicate 5623 from 1 January 2023.

The insurer said it believed climate change was making property risk less commoditised and more complex.

Beazley’s own in-house ESG goals were put under as much scrutiny by its third-party capital providers as its underwriting strategies when the insurer launched ESG-focused Syndicate 4321 at the start of this year.

The follow-on Lloyd’s syndicate posted a profitable combined ratio of 98% in 2021.

The gross written premium increase was driven predominantly by cyber and executive risk, which grew by 44% year on year.

Stamp capacity for the “beta” syndicate is set to climb by 42% to £204mn.

Syndicate 4321 will operate as a consortium led by Syndicates 623 and 2623, providing capacity for companies that meet ESG criteria.

The firm is working on an ESG consortium to add to the third-party capital division from next year.