AM Best reviewing fronting carriers after Vesttoo investigation

AM Best has announced that it is monitoring the developing situation around Vesttoo, an Israeli-based insurtech company with offices around the world, which launched an internal audit after it was alleged that collateral put up for reinsurance had been misstated in two separate transactions.

In a statement the rating agency said: “With the recent published news reports on Vesttoo, an insurtech platform, AM Best is monitoring the rapidly evolving situation and reviewing its rated fronting carriers and other insurers that have material amounts of reinsurance counterparty credit risk and reliance on various forms of collateral. Based on this review, rating actions will be taken as warranted.”

A number of Vesttoo executives have left the company as it completes a full audit of its business.

Vesttoo was valued at more than $1 billion after it raised new funding in October 2022. In June this year, it completed a $120 million renewal of quota share reinsurance cover for a leading London Lloyd’s syndicate. The insurtech uses artificial intelligence to match investors with uncorrelated, low volatility insurance-linked assets.