Arbol Inc, an insurtech platform for parametric protection products, has launched Arbol Underwriters Ltd, a registered insurance agent based in Bermuda, focused on matching reinsurance capacity with parametric insurance risks.

AUL's parent company, New York-based Arbol, is an insurtech platform and fintech company that leverages decentralised climate data, blockchain technology and AI to power its proprietary pricing platform and to offer parametric protection products and SaaS services to help a wide range of customers to transfer and manage climate risks.

Hong Guo, CEO of AUL and chief insurance officer of Arbol, said: "We are 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."

The company said that AUL intends to source original risk through a variety of channels, the first of which being partnerships with fronting insurance carriers.

Through both volume programme business and bespoke coverage solutions designed by Arbol and written through the fronting carriers, individuals and businesses can purchase parametric insurance to hedge their climate risk.

Additionally, AUL will work with re/insurers and captives in the open market to design their outwards parametric coverage solutions.

To finance the risks sourced by it, AUL intends to seek capacity from the reinsurance market.

AUL has partnered with SIG Re Ltd, a Bermuda-based reinsurer, to provide keystone committed capacity.

SIG Re has appointed AUL as an insurance agent for its parametric reinsurance business.

Through new data-driven parametric solutions designed by Arbol and the initial reinsurance capacity provided by SIG Re, the two companies said that they seek to address the sizeable protection gap that currently exists in the traditional insurance/reinsurance sector for climate risks.

SIG Re is a technology and analytics-driven reinsurer incorporated in Bermuda.

It is part of the Susquehanna International Group of Companies, one of the largest, privately held, quantitative trading firms in the world.

Founded in 1987 and headquartered in Bala Cynwyd, Pennsylvania, SIG has more than 2,300 employees worldwide.

SIG Re is registered as a Class 3A insurer by the Bermuda Monetary Authority and offers capacity on both parametric and prize indemnity insurance business.

Commenting on the launch, Todd Simkin, CEO of SIG Re, 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."

Mr Guo is a former managing director at Guy Carpenter.

Osho Jha, a co-founder of Arbol who currently serves as its chief data scientist, will be AUL's chief underwriting officer.

AUL is registered as an insurance agent by the Bermuda Monetary Authority.