Beazley PLC said Monday it has secured $45 million in indemnity against all perils exceeding a $300 million catastrophic cyber event with the issuance of a Series 144A security, commonly known as a catastrophe bond.
Designed to cover catastrophic and systemic events with remote probability, the $45 million Section 4(2) private bond is fully marketable under Rule 144A resale by the US Securities and Exchange Commission, it said in a statement.
The bond is backed by a panel of insurance-linked securities investors including Fermat Capital Management LLC, and additional tranches may be released through 2023 and beyond, the statement said.
The bond was structured and placed by Gallagher Securities, Gallagher Re̵7;s ILS arm.
Adrian Cox, CEO Beazley, said in the statement that the bond’s flexibility to scale over time and support continued growth in cyber is a “key element.”
John Seo, co-founder and CEO at Fermat, said in the statement that the deal “creates a solid foundation for a future cyber ILS market.”
Tom Wakefield, UK CEO at Gallagher Re, added “the opportunity exists for a strong and sustainable cyber disaster ILS market.”