Chubb is back in the catastrophe bond market seeking more cyber reinsurance from the capital markets, with an initial $150 million target for an issuance that could become the first cyber cat bond designed to provide annual aggregate cover for its sponsor, Artemis has learned.International insurance and reinsurance giant Chubb had sponsored its first cyber catastrophe bond in December 2023, securing $150 million of per-occurrence excess-of-loss cyber reinsurance protection from the East Lane Re VII Ltd.(Series 2024-1) transaction.That debut cyber cat bond provided Chubb with coverage through calendar years 2024 and 2025, so is scheduled to soon mature.

As a result, it is highly encouraging to learn from sources that the company is back and seeking a renewal and potential expansion of its cyber catastrophe bond coverage, while bringing the very first annual aggregate cyber cat bond tranche of notes offering to market as well.Chubb is again using its Bermuda based special purpose insurer vehicle East Lane Re VII Ltd.for its second cyber catastrophe bond sponsorship.

East Lane Re VII Ltd.is targeting issuance of a single tranche of cyber cat bond notes, to provide Chubb with a fully-collateralized and multi-year source of cyber reinsurance protection.The initial target is to secure $150 million of limit with this second cyber cat bond for Chubb, in either occurrence or aggregate form.

The offering is split $150 million from a per-occurrence tranche of notes and $150 million from an annual aggregate tranche, but Chubb is seeking feedback from the market as to which tranche it will eventually place, Artemis understands.Meaning that only one of the two tranches is expected to be issued and settled, as Chubb tests the capital markets appetite for aggregate cyber cat bond notes over occurrence based versions.East Lane Re VII Ltd.

is offering the Class A and Class B tranches of Series 2026-1 notes, one of which will be sold to investors and the proceeds used to collateralize cyber reinsurance agreements between the issuer and Chubb, to provide the protection.This new cyber cat bond will provide Chubb with protection against widespread cyber loss events on an indemnity trigger basis over a roughly two year and three month term, from January 1st 2026 to the end of March 2028, sources said.As in the first cyber cat bond from this company, the occurrence side of this cat bond offering will follow the structure of Chubb’s cyber reinsurance towers, in being split into North American and International, so this East Lane Re VII 2026-1 cyber cat bond features attachment metrics for each, as well as an overall figure.

A $150 million tranche of Class A notes would provide Chubb per-occurrence cyber reinsurance protection from an attachment point of $600 million of North American losses, or $400 million of International losses, with coverage from the notes spanning a $200 million layer of the tower for each.The Class A occurrence notes have an initial attachment probability of 1.48% and an initial expected loss of 1.24%.The attachment probabilities are 0.56% for North America and 0.92% for International, while the expected losses are 0.43% for North America and 0.63% for International, we understand.

The $150 million of Class A Series 2026-1 notes are being initially offered for sale by East Lane Re VII Ltd.with spread price guidance in a range from 6.75% to 7.25%.An also $150 million Class B tranche of notes will provide the annual aggregate cyber reinsurance protection if placed and here there is no regional split.

These notes will provide Chubb with aggregate protection from an attachment point of $600 million to an exhaustion point of $750 million, with a franchise deductible of $25 million to be cleared for a cyber loss event to qualify, we are told.The Class B aggregate cyber cat bond notes will have an initial attachment probability of 1.86%, an initial expected loss of 1.57% and are being offered to investors with price guidance for a spread ranging from 8.5% to 9.25%.Remember, we understand the plan is for only one of the tranches to be issued, as Chubb seeks feedback on the occurrence and aggregate tranche offerings from cat bond investors.

.It’s good to see Chubb looking to raise the bar in cyber catastrophe bonds by bringing the first annual aggregate tranche of notes to market, while also seeking to renew and perhaps expand the utility of its cat bond sources of cyber reinsurance.You can read all about this catastrophe bond from Chubb and every other cat bond issued in the Artemis Deal Directory..

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