UK-based specialist insurer, Beazley, has issued a $45m Catastrophe Bond that pays out if Beazley incurs claims of more than $300m from a cyber attack.

The deal was bought by investors including Fermat Capital.

Cyber insurance is a $10bn annual premium market, but is expected to grow rapidly to multiples of this amount – so the supply of risk should be available.

Demand will largely depend on the ability of enough investors to understand this highly specialised and technical form of risk.