Envelop Risk, a cyber underwriting firm with a data-driven approach, has announced the launch of a capital markets unit, as it seeks to partner with insurance-linked securities funds (ILS ) alongside its own reinsurance vehicle.
Envelop Capital Markets is based in Bermuda and will be led by reinsurance and ILS specialist David Ross, who is Envelop’s Executive Vice President for ILS & Capital.
Ross had been a specialist reinsurance and retrocession underwriter at Bernina Re, backed by Credit Suisse ILS, before working at Nephila Capital, manager of ILS.
Envelop Risk wants to develop its capacity to support the expansion of the cyber insurance and risk transfer market and sees access to capital markets via investors and ILS funds as a key element.
The new Envelop Capital Markets unit will work to develop a market for tail risk protection, retrocession and cyberreinsurance, using both parametric or index compensation and trigger structures.
Envelop Capital Markets will both underwrite the cyber risk transactions of its own Class 3A reinsurer, Augmented Re, and will also structure and underwrite transactions on behalf of ILS funds, the firm explained.
There is a need for effective cyber reinsurance and retrocession and some ILS funds are interested in providing capital to the cyber risk space, but may be more inclined to do so by partnering with a specialist underwriting firm whose sole purpose is cyber risks.
Commenting on the new launch, Ross commented, “Envelop Risk has developed market-leading capability in cyber-reinsurance underwriting, backed by best-in-class analytics. At Envelop Capital Markets, we associate cyber risk with capital and expect ILS investors to represent a growing share of this capital base. I look forward to establishing Envelop Capital Markets as the world’s leading risk transfer center for cyber risk.
Ross will work alongside Envelop Risk CUO Ari Chatterjee in Bermuda, as well as the company’s cyber risk and portfolio analytics teams in the UK.
Jonathan Spry, Co-Founder and CEO of Envelop, said, “We all know capacity is everything throughout the value chain; we seek to unlock growth by aligning capital deployment needs with investment opportunities that expand the businesses of our insurance and MGA clients.