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InsurTech Arbol enters reinsurance market with Bermuda MGU, partners with Sig Re

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InsurTech Arbol has announced the launch of Arbol Underwriters (AUL), a Bermuda-based insurance agent that will focus on matching reinsurance capacity with parametric insurance risks, the company said.

The parametric InsurTech start-up said that AUL will source original risk through a “variety of channels”, the first being fronting insurance carriers.

To finance such risks, the new MGU intends to seek capacity from the reinsurance market and has partnered with Sig Re to provide “keystone committed capacity". AUL will also work with reinsurers and captives in the open market to design outwards parametric coverage solutions, the company said.

Hong Guo, a former managing director at Guy Carpenter and Arbol’s chief insurance officer, will serve as AUL’s CEO. Osho Jha, a co-founder of Arbol who currently serves as its chief data scientist, will be AUL’s CUO.

Guo was recruited from Guy Carpenter in March to lead operations and strategy at Arbol.

InsurTech Arbol uses machine learning and smart contracts to link weather risk with capital. Originally focused on the weather derivatives market, the business now has over $250mn of capacity to deploy into parametric insurance, linking institutional investors with parametric insurance contracts.

Commenting on the launch, Guo said: “We’re excited about setting up a platform in Bermuda to offer parametric solutions in the form of reinsurance.”

“Leveraging Arbol’s massive, cutting-edge data infrastructure and proprietary pricing tools, AUL will be able to provide innovative reinsurance solutions to its clients,” he continued.

Sig Re CEO Todd Simkin said: “We are delighted to grow our existing relationship with Arbol through this new underwriting arrangement. AUL’s core emphasis on quantitative risk analytics and technology strongly aligns with our way of thinking at SIG Re.”

In January, AUL parent Arbol raised $7mn in a Series A funding round, led by Abu Dhabi sovereign fund Mubadala and with the participation of existing investors Finch Finance and Space Capital.

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