Vesttoo and fronting specialist Clear Blue have announced a partnership today, with the former intending to deploy as much as $1 billion of capacity from the capital markets through Clear Blue’s property and casualty (P&C) programs over the next year.
Vesttoo, the insurtech that uses proprietary artificial intelligence and machine learning to help companies assess and transfer risks to the capital markets, has been establishing select partnerships with entities that can help it use its technology and capital market links, to match investor funds with P&C risks.
In this case, the $1 billion of capacity that the pair hope to deploy over the next year will come from the capital markets and be structured as a variety of insurance-linked assets.
Vesttoo said that it intends to utilise, “Clear Blue’s underwriting, program management, data and analytical capabilities to facilitate faster reinsurance transactions and allow for more investors to gain access to a diversified portfolio of Clear Blue’s P&C risk, on an efficiently collateralized basis.”
“Clear Blue are as data-driven as we are, and together we can grow the pot efficiently,” explained Alon Lifshitz, Chief Financial Engineer and Co-Founder of Vesttoo. “We will use Clear Blue’s data in our models to help structure transactions with much faster time to market, all the while maintaining transparency which is critical to investors, leading to greater participation in the insurance-linked investment market.”
“We’ve been working with Vesttoo for years, and their methodology has proven itself time and again,” added Jerome Breslin, President and CEO of Clear Blue Insurance. “Their data-driven process is able to radically speed up the reinsurance process, allowing us to provide insurers with the capacity they need to thrive.”
Effectively, this arrangement would see Vesttoo become a major source of reinsurance capacity for Clear Blue program and fronted business.
Vesttoo has signed a partnership agreement to supply Clear Blue $1 billion of reinsurance capacity sourced from capital markets investors, which gives the fronting and program specialist some certainty in terms of sourcing capital.
Bringing together program fronting specialists with capital markets funding is not new, but putting technology in the middle, from Vesttoo’s stack, could bring an edge and help to make capacity more efficient, or more unique in terms of understanding the risks it is to be deployed to.
Vesttoo also said that it plans to expand its offering to include more perils in the Life and P&C sectors, while also digitalising the transaction-making process, so it can work at greater scale.
“The deal with Clear Blue is an important step towards this broader goal,” the ILS focused insurtech explained.