A new firm named Envelop Risk has launched to focus on cyber risk underwriting and analytics provision with experienced reinsurance capital markets executive Jonathan Spry at the helm, suggesting that the company may well look to cyber insurance-linked securities (ILS) in future.
Envelop Risk aims to provide cyber underwriting services to insurance and reinsurance firms, utilising its own proprietary artificial intelligence-based simulation model to give it a unique insight into cyber risks and exposures.
The company says it will generate economic value for clients through, “more-accurate policy and portfolio pricing with increased access to capital markets, while reducing overall risk exposure.”
Increased access to the capital markets certainly suggests an ILS angle is on the table for Envelop Risk, and Chief Executive Officer Jonathan Spry certainly has the credentials to suggest that cyber ILS is in the firm’s future.
Spry commented on the launch of Envelop Risk, “We are excited to launch new insurance offerings that address gaps in the rapidly-growing and increasingly complex world of cyber insurance. Our innovative, proprietary technology allows us to better determine risk and therefore price accurately. With the close of an initial seed funding round, we are in a position to expand and build upon our extraordinary team.”
Spry previously worked at reinsurance broker Guy Carpenter, where a significant amount of his time was spent in the catastrophe bond and ILS market.
He has also held roles focused on ILS at rating agency Standard & Poor’s, at RBS, StormHarbour Securities and more recently has worked in insurance investment at Aros Capital Partners, and an adviser at New Nordic Advisors Ltd. which is one of the backers of Envelop Risk.
Envelop says that it will utilise a proprietary risk model to help it understand the complexity of cyber risk, combining artificial intelligence; security analytics; intelligence gathering; economic, financial, and behavioral analysis; and modelling and simulation.
It calls this an “augmented intelligence approach”, bringing together quantitative methods to analyse cyber exposure along with human expertise in underwriting and cyber security.
We understand that Ari Chatterjee, previously of reinsurance firm Hannover Re in Bermuda, has been named Envelop Risk’s new Chief Underwriting Officer.
Formerly the lead cyber underwriter with Hannover Re (Bermuda), Chatterjee has significant experience in the cyber underwriting space and an innovative approach to risk transfer.
CEO Spry commented, “We are honored that a market leader of Ari’s stature is joining Envelop. His proven business acumen and technical know-how will complement our team’s specialist knowledge and expertise, as we go to market with our advanced form of insurance underwriting, reinsurance transactions, and risk quantification.”
Chatterjee added, “After a long pursuit to find the right InsurTech firm that will create the future of cyber insurance, I found Envelop Risk. Envelop’s technology platform and business approaches address quantification and distribution needs for the cyber insurance ecosystem. I was impressed with the dynamic and highly innovative team, and with the corporate governance. I am thrilled to be a part of Envelop, and to help and grow this business.”
Envelop has named Dr. Ray O. Johnson (QxBranch), former Senior Vice President and Chief Technology Officer of the Lockheed Martin Corporation to its Board of Directors, alongside existing Board members Jinesh Patel (QxBranch, Dymon Asia Ventures) and Nicolai Hansen (New Nordic Advisors).
Dr. Johnson, the newest member of Envelop’s Board, said, “Coming from Lockheed Martin, I recognize that cybersecurity represents one of the greatest threats facing our global economy, private corporations, and national sovereignty. Envelop’s augmented intelligence approach not only changes the game in risk factor analysis, it provides a more complete solution for pricing and providing insurance policy protection through our partners.”
With the experience in ILS and reinsurance capital markets that Spry brings, as well as the data and artificial intelligence focused scenario modelling approach, it will be interesting to see whether Envelop Risk can help to bring more cyber risk to ILS investors as it gains market traction.