Nowadays, the prospect of cyber risk has become a very important problem for small companies around the globe. Most firms are trying to avoid and reduce cyber risks, while they rarely or practically never discuss transferring those risks to third parties.

That's why Stoïk is entering the cybersecurity insurance market, targeting small and medium-sized enterprises. The young French company just raised a €25 million Series B (around $27 million with current exchange).
In many ways, Stoïk follows Coalition and At-Bay. However, whereas those companies sell their insurance products to US-based companies, Stoïk focuses solely on Europe.

Once underwritten by Stoïk, companies are protected from all cyber security-related claims. In other words, if one company has to stop production or partially shut down as a result of a cyber attack, Stoïk can offset revenue loss (gross operating margin) for that period.

Stoïk is currently underwriting companies with a turnover of €750 million or less and has set limits of €7.5 million. The company currently operates in France, Germany and Austria.

The company chose this particular vertical because cyber insurance is far more complex than other types of insurance products. Stoïk also formed a small in-house crisis management team to react to incidents, recover data, and take charge of communications during a crisis situation.

"Since Monday, we have experienced half a dozen attacks on our portfolio, including a big one, co-founder and CEO Jules Veyrat disclosed to TechCrunch last week. "We have people mobilized in the Lyon region for a ransomware attack which ground an industrial company, he said.

As soon as customers have registered, the startup offers them a summary of their exposure to cyber risk. Stoïk monitors DNS records and scans online databases for password leaks according to the domain name of the customer; it can even run internal scans to give suggestions for cloud and active directory configurations changes.

"Our thesis is that we are going to insure companies. On top of that, we are going to help them protect themselves better against cyber attacks. That way, they are happy, they get more for the same price, and we are happy, because we have wellprotected policyholders and therefore fewer claims than others," Veyrat said.

Stoïk is still pretty like the rest of the insurance industry - it has to make sure it doesn't allow too many bad apples into its portfolio of customers because that could have a seriously debilitating effect on the company's loss ratio.

The role of the insurers is to choose the risk. So, whom do I accept and in which conditions? How much do they know about cyber?" Veyrat said. "That is to say, am I ready to take up a €50m industrial company with no off-line back-up strategy? It's just an example, but these are the questions we question ourselves every day.

Since it is a Managing General Agent, it collaborates with the insurance and reinsurance companies in such a manner that they even cover the risks. Stoïk gets to set its own rates, products, and policies but outsources the risk to bigger insurance companies.

One of them is Tokio Marine HCC International, sole new investor in the Series B funding round. Existing investors also participated in the round. Alven leads the Series B with participation from Andreessen Horowitz, Munich Re Ventures, Opera Tech Ventures and Anthemis.

Stoïk does not sell its insurance products directly to customers. Instead, it depends on third-party insurance brokers who are already in contact with SMBs. As so far, Stoïk has been able to attract 1,000 insurance brokers.

By the end of 2024, Stoïk should have 5,000 policyholders. Currently, it represents €25 million in premiums, and is looking to increase customer signups in the future. Stoïk has committed to entering a new country each year, following a new European market launch towards the end of 2024 or beginning of 2025.