Vesttoo, the insurtech that uses proprietary artificial intelligence and machine learning to help companies assess and transfer risks to the capital markets, has closed on an aggregate stop-loss treaty reinsurance arrangement for a large Lloyd’s syndicate, with Acrisure Re broking the deal.
The transaction transfers the risk to capital market investors, while using Vesttoo’s technology platform meant that the stop-loss arrangement was closed and placed in just over two weeks for the unnamed syndicate.
The large Lloyd’s of London syndicate insurer benefits from aggregate stop-loss reinsurance protection covering multiple classes of business and total subject gross net written premiums of $270 million.
Working alongside reinsurance broker Acrisure Re, Vesttoo leveraged its proprietary technologies to model, structure, and price the risk, with the terms finalised within just three weeks.
Using Vesttoo’s platform, the buyer was able to secure a quote for the reinsurance coverage rapidly and then work towards the final structure alongside its broker, Acrisure Re, and Vesttoo’s team.
Supporting a range of reinsurance structures, Vesttoo focuses on perils that are far less-common in the insurance-linked securities and investments space, helping re/insurers tap the capital markets quickly for coverage of lines of business more typically seen in the traditional market, while offering diversifying opportunities to capital market investors.
“Vesttoo’s scalable solution answers a growing need in the reinsurance industry,” Adam Hedley, Partner of Acrisure Re and Head of Global Products at Acrisure explained. “The future requires speed, accuracy, and the ability to expand coverage to underserved parts of the market, as well as additional perils.
“Capacity from the capital markets, coupled with technology such as Vesttoo’s, is the way forward.”
“This transaction is a perfect example of Vestto’s rapid time to market and tech-enabled marketplace approach,” added Vesttoo CEO and Co-Founder, Yaniv Bertele. “It demonstrates the value of our technology, but beyond that, it shows there is an increasing appetite in the broader capital markets for the type of insurance-linked investments we can provide.”
We understand that the transaction was completed using a rented segregated cell solution from a Bermuda-based transformer vehicle, while the investor was a large NAIC-compliant international bank.
Stop-loss reinsurance or retrocession protection can be extremely valuable for certain types of re/insurers and has been widely utilised in the past for Lloyd’s syndicate operations.
Accessing this type of protection, from new institutional capital markets, in a fast and efficient manner could prove very attractive to other buyers and we’d imagine the news of this arrangement closing will raise interest among others for who this type of protection can be useful.
Vesttoo, through the use of its advanced artificial intelligence (AI), can provide the modelling and ongoing performance related analytics for these transactions, while the firm also works to structure the deals in the most effective manner possible.
The key takeaways are that by working with Vesttoo re/insurance players can access diversifying sources of capital market-backed capacity to cover a wide-range of risks and perils, using structures they might be familiar with and with a fast speed to market as well.
Learn more about Vesttoo’s offering by watching our recent video interview with the company’s Rob Hauff.
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