Envelop Risk, a cyber underwriting company with a data-driven approach, has announced the launch of a Capital Markets unit, as it looks to partner with insurance-linked securities (ILS) funds alongside its own reinsurance vehicle.
Envelop Capital Markets is Bermuda-based and is to be led by reinsurance and ILS specialist David Ross, who is Envelop’s Executive Vice President of ILS & Capital.
Ross had been an underwriter focused on reinsurance and retrocession at Credit Suisse ILS backed Bernina Re, prior to which he worked at ILS manager Nephila Capital.
Envelop Risk wants to develop capacity to support the expansion of the cyber insurance and risk transfer market and sees accessing the capital markets via ILS investors and funds as key.
The new Envelop Capital Markets unit will work to develop a market for tail risk protection, retrocession, and cyber reinsurance, using both indemnity, and parametric or index trigger structures.
Envelop Capital Markets will both underwrite cyber risk transactions from its own Class 3A Reinsurer, Augmented Re, and also structure and underwrite transactions on behalf of ILS funds, the company explained.
There’s a need for efficient cyber reinsurance and retrocession and some ILS funds are interested to provide capital to the cyber risk space, but may be more inclined to do so by partnering with a specialist underwriting company whose sole focus us cyber risks.
Ross commented on the new launch, “Envelop Risk have developed a market-leading capability in underwriting Cyber Reinsurance supported by best-in-class analytics. At Envelop Capital Markets we match Cyber risk with capital, and expect ILS investors to be a growing part of this capital base. I look forward to developing Envelop Capital Markets into the primary global risk transfer hub for cyber risk.”
Ross will work alongside Envelop Risk CUO Ari Chatterjee in Bermuda, as well as the firm’s cyber risk and portfolio analytics teams in the UK.
Jonathan Spry, Envelop co-founder and CEO, stated, “We all know capacity is at a premium throughout the value chain; we seek to unlock growth by aligning capital deployment needs with investment opportunities that expand the business of our insurance and MGA clients.”