There is a compelling reason why cyber-risk is the initial focus for AkinovA, as it this week became the first business licensed to operate in Bermuda’s insurance regulatory sandbox.

That reason is the potential for around-the-clock and all-year liquidity to develop in cyber-risks, which already cross several lines of business, compared to traditional property-catastrophe risks.

Henri Winand, AkinovA’s co-founder and chief executive officer, said: “This, together with other risk attributes and the development of better cyber pricing tools, will enable the creation of much more diversified ILS constructs for investors than US cat portfolios alone.

“That said, we are also regulated to do property/natural catastrophe, so the mix will depend how our broking partners want to manage the relationships they own with the clients they serve and, of course, what capacity wants to provide protection for.”

He added: “Cyber protection has immense potential for growth but is small today compared with property/natural catastrophe. However, one tends to invest where the rate of growth and profit potential is higher.”

AkinovA (Bermuda) Ltd has been granted permission by the Bermuda Monetary Authority to carry out business in the island’s regulatory sandbox. It is the first business to be given a new innovative intermediary class of licence from the BMA.

The sandbox creates a live environment for a limited period, allowing the licensed company to assess its insurtech product in a controlled way.

As reported this week, AkinovA is an independent electronic marketplace for the transfer and trading of insurance risk.

While remaining an independent marketplace, it is working with companies in the insurance industry, including Hiscox, MS & AD Insurance Group, Plug and Play Insurtech, FJ Labs, and Rob Proctor, the cofounder of ILS fund Securis.

There has been further support from brokers, funds and “transformers”.

Dr Winand said: “Our goal is to keep the initial ecosystem small whilst we are in the sandbox and do a few transactions well for our clients: quality over quantity.”

AkinovA will operate within the regulatory sandbox for as long as it takes to test all the layers of the marketplace, and establish confidence with clients and stakeholders, said Dr Winand. He added that it would be quality over quantity before things ramped up.

He said: “We would expect this to be in different phases since, first, the matching (marketplace price discovery) is tested thoroughly with initial products and we move to other parts of the market operations.”

The company is not yet able to state how many employees it may eventually have based in Bermuda.

Regarding the unusual company name, which on its trademarked logo includes a final “A” that is upside-down, Dr Winand said the Aki part of the name denotes “bright”, while nova means new, therefore the word represents bright-new.

As for the upside-down “A”, Dr Winand said the capital A at the beginning of the AkinovA’s name represents peak risk, while the upside-down capital A at the end of some of AkinovA’s logos is the symbol “for all” in mathematics.

“Transfer from peak risk to many is insurance,” he explained.