Fast-growing insurtech marketplace Vesttoo targets $7bn deal flow in 2022

Vesttoo expects to structure transactions for some $7bn of limit in 2022 by matching coverage demands of MGAs, MGUs, fronting carriers and (re)insurers with the appetite of its growing investor panel – including by bringing quota share capacity to the program sector, The Insurer can reveal.

Yaniv Bertele – Vesttoo 1

The Tel Aviv, Israel-based insurtech pitches itself as the first marketplace for non-catastrophe insurance-focused risk transfer and investments.

It uses AI and machine learning to support the transfer of property and casualty (re)insurance, lapse, mortality and longevity risk to the capital markets.

Vesttoo is one of several platforms providing capital markets investors with access to primary insurance risk – including in the program sector – often on a collateralised basis and typically targeting non-cat business, including casualty.

As previously reported, Long Tail Re and Multi-Strat have been involved in a number of innovative casualty transactions, while Ledger has been increasingly active in the program space and recently launched an ILS fund backed by Ontario Teachers’ Pension Plan.

Vesttoo factfile

Vesttoo co-founder and CEO Yaniv Bertele told our sister publication Program Manager that his platform provides cedants with fully collateralised capacity for high frequency, low severity risks in the P&C and life markets.

The company was established in 2018 and began transacting business in late 2020. Its first deal was placing an aggregate stop loss for a large trucking MGA with what Bertele described as “a very large financial institution”.

In the time since, Bertele said the platform has structured $2.2bn of capacity. To date, 95 percent of Vesttoo’s customers are MGAs, fronting carriers and traditional insurers and reinsurers based in the US, with the remainder UK-based entities.

Based on registered interest and its expected deal flow through the remainder of 2022, Bertele said he expects Vesttoo will structure around $7bn of capacity this year.

“It’s a pretty well diversified pool of clients. The market that we enable is far more appealing in the short term to small to mid-size companies,” said Bertele.

“We’ve done motor, commercial trucking, non-standard auto, construction liability, general liability, construction defects, and even some cyber books,” he added.

About 80 percent of its transactions so far have been treaty-based, with the rest either parametric or run-off coverages.

How it works…

Fronting relationships

It writes quota share and stop loss business on behalf of investors that include provident funds, “top tier” financial institutions, hedge funds and very large family offices.

And since it started transacting business, Bertele said Vesttoo has provided coverages for “most of the fronting carriers in the US”.

Reinsurers have also been buying retro via Vesttoo’s technology platform, Bertele said. And while he would not share the names of specific clients, he said buyers “include a few of the top five”.

Those deals have included marine and aviation-focused industry loss warranties, Vesttoo’s CEO noted.

The platform has been actively recruiting from the insurance industry as it continues to develop its insurance-linked program products.

Yaniv Bertele PQ

While Vesttoo connects buyers of reinsurance or retro protection to investors, Bertele was quick to point out that the technology platform’s intention is not to disintermediate the market.

Of the business it has placed so far, Bertele said 40 percent of its deal flow came from brokers including Aon, Guy Carpenter, WTW, Gallagher, BMS and EC3, among others.

“We’re not looking to disintermediate. We think that the brokers have a very strong role in this industry and being the trusted advisers of those cedants, and we transact for the reinsurers and with the reinsurers,” he added.