Velocity Risk announces acquisition by Oaktree

Nashville, TN, Dec. 28, 2021 (GLOBE NEWSWIRE) -- Velocity Risk Underwriters, LLC (“Velocity Risk”), a catastrophe-focused property and specialty insurance risks managing general agent (“MGA”), has announced its acquisition by funds managed by Oaktree Capital Management, L.P. (“Oaktree”), a leading global investment manager specializing in alternative investments.

The Envelop team combines decades of insurance and capital markets experience with cyber security, engineering, artificial intelligence, and data analytics experts from deep tech enterprises like defence, aerospace, and energy.
Envelop Risk underwrites bespoke reinsurance for global insurance firms, differentiating its products through the application of advanced cyber analytics, enabling customers to manage their portfolios with greater precision. The firm can offer reinsurance capacity combined with pricing technology, policy wording, and claims support to introduce proven cyber insurance capabilities into maturing cyber insurance markets. Additionally, Envelop partners with cyber technology firms to launch embedded insurance solutions.Founded in 2015 by Nephila Capital (“Nephila”) and headquartered in Nashville, Tennessee, Velocity Risk provides insurance coverage to clients in catastrophe-exposed areas of the United States. Since its inception, Velocity Risk has been focused on providing best in class products and services in selected markets.

Phil Bowie, Velocity Risk’s CEO, said, “The launch of Velocity Risk was designed to disrupt the value chain between insurance and capital, through innovative underwriting and operational efficiency. We are thrilled to have received Oaktree’s support and believe we have the right investor in Oaktree to help us continue building out our business.”

“Velocity Risk has established itself as a leading property-focused MGA through the quality of its management team, its strong underwriting results and its investment in enabling technologies. We are excited to partner with the Company and support its track record of driving growth and delivering value for its stakeholders,” added Greg Share, Managing Director in Oaktree’s Global Opportunities Group.

Frank Majors, co-CEO of Nephila said, “We’re delighted to be partnering with Oaktree and are confident they will help Velocity Risk continue to build on its past successes. We look forward to continuing to work with Velocity Risk through our ongoing minority shareholding.”

Evercore served as sole financial adviser to Velocity Risk and Willkie Farr & Gallagher LLP served as legal counsel to Velocity Risk. TigerRisk Capital Markets & Advisory served as exclusive financial advisor to Oaktree and Debevoise & Plimpton LLP served as legal counsel to Oaktree.

In less than 5 years, Envelop Risk has become a force in cyber reinsurance, capturing significant market share and competing with the giants in the industry. The firm has underwritten over $250 million of business since 2018, while comfortably besting industry benchmarks for performance.

Envelop Risk plans to use the proceeds from the round to expand operations in cyber reinsurance and cyber technology partnerships, while continuing to invest heavily in predictive analytics for assessing the likely economic consequences of cyber risks to commercial entities. As cyber has become a key trigger in nearly every business area, the firm intends to launch new products in adjacent areas of corporate risk over the next year. Critically, this raise will establish a hybrid balance sheet model; enabling the firm to deploy its own risk capital in alignment with existing partners.

Envelop Risk co-founder and CEO, Jonathan Spry, stated, “We are delighted to have reached such a significant milestone in our funding journey. This transaction will allow us to continue our leadership in data-driven specialty (re)insurance underwriting and will be transformational for our business reach and activity. For the first time Envelop Risk will be able to assume positions in risk capital, which gives us greater alignment with our partners. We are all really excited to work with SoftBank Investment Advisers and together meet the huge opportunities that we see present in emerging and complex risk underwriting.”