Axis completes cyber catastrophe bond

Axis Capital Holdings Ltd. on Tuesday said it has completed a series 144A cyber catastrophe bond to provide several of its subsidiaries with $75 million of fully collateralized indemnity reinsurance protection for systemic cyber events on a per occurrence basis.

Long Walk Reinsurance Ltd., Bermuda registered special purpose vehicle, issued $75 million of Series 2024-1 Class A notes, maturing in January 2026, in a transaction structured and distributed by Aon Securities with risk analysis by CyberCube Inc., Axis said in a statement.

Peter Vogt, chief financial officer at Axis, said in the statement the transaction could “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, said in the statement the issuance “received broad investor support.”

Pascal Millaire, CyberCube CEO, said in the statement the deal “lays a foundation for the growth of cyber as an alternative asset class for ILS investors.”

The cyber cat bond comes amid a broader discussion of systemic risk posed by cyber exposures and possible solutions, including potential federal government involvement.

Beazley PLC and Hannover Re have both tested the waters for capital markets solutions to systemic cyber exposures with cyber cat bond placements this year.