We recently wrote about the market anticipation of a trade-able 144a Catastrophe (“Cat”) Bond.
Now Beazley, a London-based specialist insurer, has launched something related, the first-ever cyber catastrophe bond. The $45 million bond gives Beazley indemnity for all risks in excess of a $300 million catastrophic event and is backed by a group of insurance-linked securities (ILS) investors, including Fermat Capital Management. This marks a milestone in the history of the sector, as it is the first time an insurance-linked securities instrument has been created to cover catastrophic cyber risk. The bond was structured and placed by Gallagher Securities, the ILS-arm of Gallagher Re.
Source: Insurance Co. Offers ‘Cyber Catastrophe Bond,’ Which Seems About Right