Stone Ridge launches blockchain & digital asset risk MGA, Proof Insurance

Stone Ridge Asset Management, the New York based asset manager an alternative risk premia focus, including reinsurance and insurance-linked securities (ILS), has launched Proof Insurance Solutions, a managing general agent (MGA) with a focus on underwriting risks from the blockchain and digital asset sectors.

The move ties in nicely with Stone Ridge’s other venture in digital assets, NYDIG which provides bitcoin-related products across a range of industries, from banking and insurance to fintech and nonprofits.

Of course it also ties in well with the alternative asset managers ability to manage portfolios of insurance and reinsurance risks for third-party investor clients.

Proof Insurance Solutions, LLC is licensed to provide insurance products across 51 US states and we understand capacity is being provided via a panel of carriers including Core Specialty Insurance Holdings, Inc.

We don’t at this stage know if any third-party capital is being used to support the Proof Insurance business. It’s perhaps too early at this stage, but we’d imagine Stone Ridge is considering how its third-party investors could access returns of this digital asset insurance business line via its reinsurance fund offerings.

Proof offers crypto-focused insurance solutions that it says are purpose built for the digital-asset industry, with a significant focus on bitcoin related clients.

The product offering covers entities in the bitcoin value-chain, from crypto mining operations, to asset managers, service providers, software products with a decentralized and bitcoin focus, as well as businesses that focus on digital collectibles and non-fungible tokens (NFT’s).

Mike Sapnar, the former CEO of TransRe who left that reinsurer to join Stone Ridge’s NYDIG bitcoin and digital asset venture, is a co-founder and CEO of Proof Insurance Solutions, as well as leading insurance related ventures at Stone Ridge.

Matt Carey, is the other Co-Founder and the Chief Operating Officer of Proof and was most recently the U.S. Head of Insurance Solutions at NYDIG.

Greg Flood has joined Proof as Lead D&O Underwriter, having previously served as the head of underwriting at RELM Insurance, a Bermuda-based provider of risk transfer solutions to the digital asset industry, while Zach Kramer is lead cyber underwriter, having previously worked at EmergIn Risk and AIG.

According to the details we’ve seen, Proof Insurance Solutions could expand its focus to underwrite insurance for businesses outside the digital asset space in time, with broader technology-focused commercial risk opportunities seen in its future.

It aligns well with Stone Ridge’s appetite for cyber risks as well.

The asset manager recently backed what’s being called the first cyber quota share arrangement, a $100 million deal with reinsurance firm Hannover Re.

As Proof Insurance Solutions expands, we could see Stone Ridge finding novel ways to connect its insurance-linked investments businesses with Proof as a new source of risk. It’s yet another interesting development in the Stone Ridge business, as it continues to expand its footprint.