An insurtech start-up is harnessing the power of artificial intelligence and quantum computing to provide cyber underwriting to insurers and reinsurers.

Bermuda will play a role in the growth of Envelop Risk, which is believed to be the first insurtech company with a physical presence on the island. Envelop is looking to expand in the future as the multibillion dollar cyberinsurance market grows.

Ari Chatterjee, chief underwriting officer, is based in Bermuda and previously worked as lead cyber underwriter with Hannover Re (Bermuda) and before that was with Flagstone Re. While Jonathan Spry, chief executive officer of London-headquartered Envelop Risk, and John Kelly, cyber-risk architect, visited the island last week to increase awareness of what the company offers.

Envelop Risk is a global specialty cyberinsurance analytics and underwriting company. In the US it has offices in Boston and Washington. It partners with cybersecurity firms to provide custom insurance products.

The company’s mission is to “develop, underwrite, and distribute innovative insurance and reinsurance products that provide genuine coverage, and superior risk transfer”.

Mr Spry described the company as taking a partnership approach with insurers and reinsurers. He praised the Bermuda Business Development Agency for the assistance it has provided to the Envelop team as it makes connections on the island. He said that while the cyberinsurance market is a global opportunity, the Bermuda market is crucial.

He added: “We are very happy to be in Bermuda. We have entities here and we are hanging out the signs in Bermuda. Ari is here all the time, and we’re in discussions with some of the big players.”

Mr Chatterjee explained that there are large gaps in cyberinsurance. He said Envelop Risk seeks to assist insurers and reinsurers bridge the gaps, adding: “We are an enabler of cyber insurance business and we will support our insurance and reinsurance partners to build scalable capabilities on top of our platform.”

Dr Kelly was formerly technical lead for corporate data analytics at Lockheed Martin. He said Envelop is using “machine learning and AI with human expertise to leverage the [cyber]data, which is from numerous sources but still sparse”. He said that with cyber the nature of threats and attacks is constantly changing, adding: “Augmented AI is crucial to predict the trends from the data.”

The Envelop team also features Paul Guthrie, chief technology officer, who has consulting experience in analytics and technology strategy for Fortune 100 firms, Nasa and the US Department of Defence. Ray Johnson, a former chief technology officer at Lockheed Martin Corporation, is one of Envelop’s directors, and Adam Fox, a former managing director of Marsh & McLennan, is a senior adviser.

When asked about the potential size of the cyberinsurance market, Mr Spry said he would not disagree with predictions that it will become a $20 billion market in the next five years. He said Envelop Risk had received a good response in Bermuda. “The reception has been gratifying. [Cyberinsurance] is something that is here to stay. It is an important piece of the puzzle. We will be growing our team and have a substantial presence in Bermuda.”

• Envelop Risk has a website at https://www.enveloprisk.com/