Stone Ridge launches blockchain & digital asset risk MGA, Proof Insurance

Stone Ridge Asset Management, the New York-based asset manager with an alternative focus on risk premiums, including reinsurance and insurance-related securities (ILS), has launched Proof Insurance Solutions, a managing general agent (MGA) focused on underwriting risks from the blockchain and digital sectors assets.

The move dovetails nicely with Stone Ridge’s other digital asset venture, NYDIG, which offers bitcoin-related products across a range of industries, from banking and insurance to fintech and nonprofits.

Of course, it also ties in well with alternative asset managers’ ability to manage portfolios of insurance and reinsurance risks for third-party investor clients.

Proof Insurance Solutions, LLC is licensed to offer insurance products across 51 US states, and we understand that capacity is delivered through a panel of carriers, including Core Specialty Insurance Holdings, Inc.

We do not know at this stage whether any third party capital is being used to support the Proof Insurance business. It may be too early at this stage, but we imagine Stone Ridge is considering how third-party investors can access the returns of this digital asset insurance business via its reinsurance fund offerings.

Proof offers crypto-focused insurance solutions that it says are purpose-built for the digital asset industry, with a significant focus on bitcoin-related clients.

The product offering covers entities in the bitcoin value chain, from cryptomining, to asset managers, service providers, decentralized and bitcoin-focused software products, as well as businesses focused on digital collectibles and non-fungible tokens (NFTs).

Mike Sapnar, the former CEO of TransRe who left that reinsurer to join Stone Ridge’s NYDIG bitcoin and digital asset venture, is co-founder and CEO of Proof Insurance Solutions, as well as leading insurance-related businesses at Stone Ridge.

Matt Carey, is the other co-founder and Chief Operating Officer of Proof and was most recently US Head of Insurance Solutions at NYDIG.

Greg Flood has joined Proof as Lead D&O Underwriter, having served as Head of Underwriting at RELM Insurance, a Bermuda-based provider of risk transfer solutions to the digital asset industry, while Zach Kramer is Lead Cyber ​​Underwriter, having worked in EmergIn Risiko and AIG.

According to the details we’ve seen, Proof Insurance Solutions may expand its focus to underwriting businesses outside the digital asset space over time, with broader technology-focused commercial risk opportunities seen in the future.

It aligns well with Stone Ridge’s appetite for cyber risk as well.

The asset manager recently backed what is being called the first cyber quota share arrangement, a $100 million deal with reinsurer Hannover Re.

As Proof Insurance Solutions expands, we can see Stone Ridge finding new ways to connect its insurance-related investment businesses with Proof as a new source of risk. It’s another interesting development in the Stone Ridge business as it continues to expand its footprint.