AXIS proud of ILS investor support for first 144A cyber cat bond: CFO Vogt
AXIS Capital saw its landmark $75 million Long Walk Reinsurance Ltd. (Series 2023-1) 144A cyber catastrophe bond settle yesterday and CFO Peter Vogt hailed the support of the insurance-linked securities (ILS) investor community.
“Long Walk is a strong example of how AXIS is demonstrating leadership through innovation and by developing elevated specialty solutions to address the challenges in a dynamic marketplace,” Peter Vogt, Chief Financial Officer at AXIS explained.
“Together with our partners Aon Securities, CyberCube and Sidley Austin, AXIS is proud that the ILS investor community has shown tremendous confidence in and acceptance of Long Walk, the first 144A cyber catastrophe bond, and our cyber underwriting capabilities,” Vogt continued.
We’ve been tracking the issuance of AXIS Capital’s Long Walk Re cyber cat bond since mid-October, when Artemis was the first to break the news of this land-mark ILS transaction.
It marks the ILS sectors opening up to cyber risk, in fully-securitized, Rule 144A format and since the Long Walk Re transaction first emerged, we’ve now seen two other full 144A cyber cat bonds come to market, Beazley’s PoleStar Re deal that is still being marketed to ILS investors, and the just launched first cyber cat bond from Chubb, East Lane Re VII.
AXIS’ first 144A cyber catastrophe bond provides it with $75 million of fully collateralized indemnity reinsurance protection for several of its subsidiary companies, including the insurance and reinsurance underwriting side, as well as its syndicate at Lloyd’s, against systemic cyber events on a per occurrence basis.
Long Walk Reinsurance Ltd. issued $75 million of Series 2024-1 Class A notes, that mature in early January 2026, and were sold to ILS investors to support the reinsurance agreement with AXIS.
AXIS CFO Vogt sees the first Long Walk Re cyber cat bond as a critical capacity source for the company, saying, “We expect Long Walk to provide meaningful support for the growth of our cyber insurance portfolio in the future.”
He also noted the importance of a first 144A cyber cat bond getting to market, adding that, “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.”
The Long Walk Re cyber cat bond was structured and sold to investors by Aon Securities, the capital markets and ILS division of the insurance and reinsurance broker.
Richard Pennay, CEO of Insurance-Linked Securities at Aon Securities, commented, “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.
“The transaction also ensures investors receive additional diversification across the catastrophe bond product spectrum, helping them to navigate potential volatility and build a resilient portfolio. Significantly, this transaction marks an important milestone, whereby the catastrophe bond market is leading in the development of a catastrophe-based cyber reinsurance product.
“There is strong insurer demand for the further development of this non-proportional product, and we commend AXIS Capital’s leadership in developing the catastrophe bond capacity.”
Risk modelling and analysis for the first 144A cyber cat bond was provided by CyberCube’s Portfolio Manager platform.
Pascal Millaire, CyberCube CEO, said, “We are proud to have supported AXIS in the world’s first cyber 144A cat bond. AXIS, Aon Securities, Sidley Austin and CyberCube worked incredibly hard as a team on the development of a new chapter for the ILS market. We are very pleased to be part of this groundbreaking transaction. This deal highlights the confidence shown by the market in Portfolio Manager and the team at CyberCube. We believe this lays a foundation for the growth of cyber as an alternative asset class for ILS investors.”
Sidley Austin served as the deal counsel on the transaction and Long Walk Reinsurance is a Bermuda exempted company and registered as a special purpose insurer.
You can view details of all three 144A cyber cat bonds to hit the market so far in the Artemis Deal Directory.
You can read all about this first 144a cyber catastrophe bond Long Walk Reinsurance Ltd. (Series 2023-1) and details of every other cat bond in our extensive Artemis Deal Directory.
