Envelop launches third-party investor backed cyber reinsurance SPA 1925 at Lloyd’s

Data-driven cyber underwriting company Envelop Risk has announced the launch of a third-party investor backed special purpose arrangement (SPA) vehicle at Lloyd’s that will underwrite cyber reinsurance.

The newly launched Envelop SPA 1925 is a dedicated cyber reinsurance Special Purpose Arrangement (SPA) at Lloyd’s and is supported by risk capital from Envelop, as well as a diverse panel of third-party investors, the company said this morning.

Envelop Risk CEO Jonathan Spry commented that, “To have gained the backing of such highly regarded investors is a testament to the progress and maturity Envelop has achieved.”

We understand the backers range from typical Lloyd’s name-type high-net worth investors, to one of the companies that acts as a fund-like aggregator of Lloyd’s capital for deployment among syndicate and underwriter opportunities in the market.

Envelop SPA 1925 has been launched in partnership with Lloyd’s specialist insurance group Apollo, through its Strategic Partner Syndicates business and Apollo Syndicate 1971.

It opened for business on 1st January 2024, with Chris Baddeley taking on the role of active underwriter, based in London.

The company said that, as Envelop Risk’s second underwriting platform, it “marks an important strategic milestone” for the firm, representing “the next step in Envelop’s longer term ambition to establish a stand-alone syndicate.”

Last year, in 2023, Apollo Syndicate 1971 put cyber reinsurance capacity to work, writing the business as a new class with Envelop providing underwriting expertise and insight.

With this initiative proving a success, the pair have now converted this into the newly launched cyber reinsurance SPA, with growth approved by Lloyd’s.

“The successful launch of the SPA demonstrates Envelop’s ability to raise new capital to support the growth of the global cyber (re)insurance market,” the company explained.

Envelop CEO Spry said, “I am delighted to announce the launch of Envelop SPA 1925, which significantly strengthens our ability to support the growth and resilience of the global cyber insurance market. It furthers our ambition of not only being the best at underwriting cyber risk, but at leading the market in the management of risk capital for cyber.”

Further commenting on the investor-backing, Spry said, “With their support, that of Apollo and through our augmented intelligence approach to underwriting, we are strongly positioned to enable more insurers to safely realise the vast opportunity that cyber presents.”

Andrew Gray, Director of Strategic Partner Syndicates at Apollo added, “We are delighted to have been able to help Envelop achieve the next milestone in their Lloyd’s strategy. Apollo’s ability to incubate new products within one of our existing managed syndicates, and then support the evolution into an SPA, demonstrates our unique partnership approach to establishing innovative new businesses at Lloyd’s.”

Envelop’s CEO Jonathan Spry had told us in an interview during the fourth-quarter of 2023 that the company was expecting to have capacity from the capital markets available to deploy in 2024.