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Cyber Risks Spark Optimism in Cat Bond Market

March 8, 2024 | 1 minutes reading time | By John Hintze

Expectations are high even as the growth factor of inflation recedes.

Record catastrophe (cat) bond volume in 2023 stemmed largely from inflation. Although that factor may be moderating, a first-time cyber cat bond early last year gave way to an unexpected rush toward year-end, indicating strong interest from Wall Street investors in a risk transfer market with significant growth potential.

Property cat bond issuance under Rule 144A, which allows private placements to be sold among qualified institutional buyers, reached a record $15 billion, and new cyber cat deals added another $415 million, according to Artemis. Much of the cat bond activity overallwas in the fourth quarter, including four new cyber deals.

Outstanding volume rose 21%, to $42.9 billion, from $35.5 billion in 2022.

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