Envelop Risk launches cyber ILS practice Envelop Capital Markets

Bermuda-based cyber specialist Envelop Risk has launched Envelop Capital Markets with ILS specialist David Ross at the helm.

The new practice will develop a market for tail risk protection, retrocession and cyber reinsurance through both indemnity, parametric and index structures.

Envelop Capital Markets will underwrite transactions from Envelop’s Class 3A reinsurer, Augmented Re, and structure and underwrite transactions on behalf of ILS funds.

This publication revealed in June that cyber tech modelling company and MGA Envelop Risk had swooped for Bernina Re’s Ross to lead a new ILS practice.

At Bernina Re he served as lead underwriter for US business and retro.

Ross had joined the Class 3A Bermudian reinsurance company in December 2019, initially as its head of analytics, a role in which he was tasked with developing and managing the firm’s actuarial and analytics capability in pricing, reserving and capital modelling.

In his new role at Envelop Risk he will work closely with CUO Ari Chatterjee in Bermuda, as well as the firm’s cyber risk and portfolio analytics teams in the UK.

Led by co-founder Jonathan Spry, Envelop Risk writes cyber reinsurance on behalf of MS Amlin AG using its proprietary modelling and analytics tools developed from its Bristol, UK base.

The recent spike in cyber primary rates – fuelled by the surge in ransomware claims – has also fed its way through to the reinsurance market, which is currently dominated by quota share (QS) capacity.

Envelop Risk is expected to write up to $200mn in gross written premium in 2022, despite maintaining a cautious stance at the 1 April renewals amidst the Ukraine conflict uncertainty.

Envelop Risk writes both QS and excess-of-loss reinsurance and is thought to be the industry’s largest cyber market for the latter.

The arrival of Ross is a further example of the group bolstering its senior underwriting talent since a landmark SoftBank deal last year, which saw the business raise $130mn at a $400mn+ post-money valuation.

Earlier this year, it appointed Swiss Re’s market head of P&C for the UK and Ireland Simon Welton as an executive vice president focusing on client management and partnership development.

Ross commented: “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,” he continued.

“I look forward to developing Envelop Capital Markets into the primary global risk transfer hub for cyber risk.”

Spry added: “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.”