Howden Re places Envelop Risk cyber XL-on-XL retro cover led by Ariel Re

Howden Re has placed a cyber retro cover on behalf of Envelop SPA 1925 which enables the cyber reinsurance vehicle to protect both the excess of loss and quota share components of its portfolio in one placement, The Insurer can reveal.

The reinsurance intermediary worked with Ariel Re and other markets to develop the structure, which has been designed to help meet capital requirements around the SPA’s main disaster scenarios.

The placement is understood to have used an Ariel Re wording tailored for the purpose by Howden.

Howden Re’s global head of cyber Luke Foord-Kelcey described the placement as an “industry first”.

“Outside of proportional protection, until now, reinsurers looking to protect a portfolio combining both excess of loss and quota share have needed to solve for each element separately,” he said.

“This solution means the whole portfolio can be protected with a single, cat-focused excess-of-loss placement.

“We believe this placement shows the reinsurance market what can be done to manage exposure and capital to gain additional confidence in this class. We are proud to have launched this industry-first initiative with such forward-looking clients and markets.”

Envelop Risk CEO Jonathan Spry added: “We’re delighted to have worked with Howden Re and our key partners in the retro market on the outwards purchase for Envelop SPA 1925. The launch of SPA 1925 has strengthened our ability to support the growth of the global cyber insurance market and to lead the management of risk capital for cyber. Central to this has been the successful execution of this excess-of-loss placement.”

Chris Baddeley, active underwriter of SPA 1925, said: “The careful use of technical data and close collaboration between all parties has enabled what was once a difficult concept to now become a viable purchasing strategy for reinsurers."

Daniel Carr, head of cyber at Ariel Re, added: “We were delighted to participate in what is a new, thoughtful and market-leading transaction. Cyber risk is complex and not without nuance, particularly on a retrocession basis. We highly valued the input and capabilities of Howden Re in both navigating those challenges and formalising this placement, alongside a well-informed and highly engaged client in Envelop/Apollo.”