Arbol, a technology-led company focused on parametric risk transfer and weather insurance markets, has announced the formation of Arbol Underwriters Ltd. (AUL), a registered insurance agent based in Bermuda, that will focus on matching reinsurance capacity with parametric insurance risks.
Arbol Underwriters Ltd. (AUL) will originate business through a number of channels, the primary one being partnerships with fronting insurance carriers to begin.
The company is working with Bermuda based reinsurance firm SIG Re Ltd., part of the Susquehanna International Group of Companies (SIG) which is one of the largest privately-held, quantitative trading firms in the world.
SIG Re is registered as a Class 3A insurer by the Bermuda Monetary Authority and offers reinsurance capacity on both parametric and prize indemnity insurance business.
SIG Re will provide keystone committed capacity to Arbol’s parametric programs and has appointed AUL as an insurance agent for its parametric reinsurance business.
Arbol will design arrangements for providing reinsurance to volume program business and other bespoke coverage solutions, that are written through the fronting carriers, meaning that individuals and businesses can purchase parametric insurance to hedge their climate risk, with reinsurance backing via Arbol and SIG Re.
AUL will also work with re/insurers and captives in the open market, to design outwards parametric coverage solutions.
“We are excited about setting up a platform in Bermuda to offer parametric solutions in the form of reinsurance,” explained Hong Guo, CEO of AUL and Chief Insurance Officer of Arbol. “Leveraging Arbol’s massive, cutting-edge data infrastructure and proprietary pricing tools, AUL will be able to provide innovative reinsurance solutions to its clients.”
Guo, a former managing director at Guy Carpenter and GC Securities who joined Arbol as Chief Insurance Officer earlier this year, will serve as AUL’s CEO.
Osho Jha, one of Arbol’s co-founders and currently its chief data scientist, will be AUL’s Chief Underwriting Officer.
AUL will finance the parametric risks it underwrites using capacity sources from the reinsurance market, with SIG Re’s committed capacity its keystone provider.
SIG Re is a technology and analytics driven underwriter, so its ambitions to underwrite predictable and understandable lines of business that are supported by data analytics should pair well with Arbol’s data first approach to climate, weather and catastrophe focused parametric re/insurance products.
Todd Simkin, CEO of SIG Re, also commented on the news, “We are delighted to grow our existing relationship with Arbol through this new underwriting arrangement. AUL’s core emphasis on quantitative risk analytics and technology strongly aligns with our way of thinking at SIG Re.”
The two companies hope to address the climate protection gap that exists in re/insurance and economic terms, providing data-driven parametric solutions designed by Arbol, alongside the initial reinsurance capacity provided by SIG Re.