Pillar two · Commercial services

Underwrite AI risk on evidence, not on a questionnaire.

Continuous covenant underwriting. The first product running on the schema, and the way insurers price the autonomous frontier first.

AI liability, the first class Insurance · Finance · Corporates Pricing layer · Layer 2
§ 01 · The first product

Continuous covenant underwriting.

What you buy: a continuous, first-party evidence feed on an insured's AI estate, scored against the open covenant schema and delivered to the underwriting desk. Not a questionnaire and not a consulting report; an evidence service the underwriter prices against.

Arkaya supplies continuous, first-party evidence of an insured's AI estate, measured against an eligibility floor at inception and monitored across the term. It replaces the underwriting questionnaire with a record read against obligation rather than self-reported periodically. The underwriter prices it; Arkaya does not.

The covenant schema is class-agnostic. AI liability is the first class written against it, because the underwriting asymmetry is largest there. Cyber, technology E&O, D&O and operational resilience follow.

Governance evidence record GET-v1 · continuous
Third-party access control
helpdesk access logs · continuous
open signed
Privileged-access review
IAM change log · event-triggered
clear signed
Model-override governance
override log · monthly review
in review signed
Incident notification
regulator-of-record filing · on event
in progress filed
Board protocol adherence
decision log vs protocol · monthly
within bounds signed
provenance: source system engine signing key · each hop retained in the record
record sealed · sig 0x8f3ac21e9b47d05e verified offline · score: null
Format specimen · illustrative values · no client data · no score issued

The governance premium is what you earn by making it visible.

§ 02 · Why now

The market is splitting on AI rather than pricing it.

Mainstream carriers are excluding it. The ISO general-liability AI exclusion endorsements took effect on 1 January 2026 across forms underpinning most US commercial liability, and the major carriers have filed to adopt them. A thin specialty cohort writes affirmative cover at the top, a handful of products worldwide.

Exclusion at the bottom and scarce capacity at the top is the wedge. There is demand for first-party and third-party AI cover and no credible basis for writing it profitably without continuous evidence of the insured's AI estate. That evidence is what makes the risk selectable in between.

A machine-readable schema is only as good as the evidence that feeds it. Evidence produced at human cadence, the periodic questionnaire and the point-in-time attestation, cannot describe an estate that changes between checkpoints. Machine-readable underwriting needs evidence produced at machine cadence: captured continuously, at source, as the estate moves. The decision stays human and is recorded; the observation runs at the speed of the thing observed.

Machine-readable underwriting requires machine-cadence evidence. The decision stays human; the observation does not.

§ 03 · Why it pays

What the evidence moves.

A premium is three things: the expected loss, the loading for uncertainty, and the cost of the capital held behind the policy. Evidence acts on the second and third. The uncertainty loading is the documented surcharge underwriters apply to risks they cannot characterise; reduce the ambiguity and the loading falls. At Lloyd's the capital channel flows in full: every syndicate's capital requirement is calculated on an internal model, so evidence that narrows the distribution reaches the capital held, not only the rate.

A writable class
AI risk becomes writable, where today it is excluded or declined.
A measured estate
The underwriter prices a measured estate, not a declared one.
Drift caught mid-term
Boundary and register drift is detected during the term, not at the next renewal.
Smaller dispute surface
A contemporaneous record compresses the causation dispute at claim.
Aggregation visible
AI exposure is aggregated across the book for exposure management and reinsurance.
Seat
What the evidence moves
Where it lands
Insurer
The ambiguity loading on an uncharacterisable class, the capital held behind the book, and the loss-adjustment and dispute cost at claim.
Loss ratio, capital efficiency, expense ratio
Lender
The spread priced on incomplete information and the margin of conservatism capitalised against weak data.
Net interest margin, RWA
Acquirer / sponsor
The diligence discount, the escrow and holdback, the W&I retention, and covenant surveillance through the hold.
Entry price, retained exposure, IRR
Corporate (the user)
The premium and terms at renewal, the all-in cost at refinancing, the recovery and dispute surface at claim, and the price of the whole at exit.
Cost of risk, cost of capital, enterprise value
Reinsurer / HoldCo / GP
Sight of a delegated portfolio's true control state between periodic reviews.
Aggregation risk, capacity deployed

It also widens the writable book. An applicant below an honest floor gets a route to becoming insurable rather than excluded.

§ 04 · How the carrier reads it

Calibration, and the evidence ladder.

Arkaya supplies the evidence; the underwriter prices it. The calibration layer states how to read a governance evidence record into rating, retention, limit, recovery, reserving and capital, in direction and mechanism. The thresholds and the rate response are the carrier's. The schema and the conformance test are Arkaya's; the calibration, the position and the rating are not.

Every answer carries a grade, and the grade caps the credit available beneath it.

Verifiable
Independently checkable from the sealed record, without the vendor's or Arkaya's code.
Evidenced
Rests on the produced record.
Attested
Rests on a named officer's signature.
Asserted
Unproven. Attracts no credit.
The evidence ladder CREDIT AVAILABLE Asserted Attested Evidenced Verifiable Unproven. No credit. A named officer’s signature. The produced record. Checkable from the sealed record.
The evidence ladder. The grade caps the credit available beneath it; only the top grade is independently checkable without the vendor’s or Arkaya’s code.

What the read looks like at the desk.

Two insureds, same sector, same limit sought. One produces continuous, verifiable evidence of its AI estate; the other answers a periodic questionnaire. The underwriter reads the difference and prices it.

Insured A · Verifiable
Continuous first-party evidence
  • CoverAffirmative AI cover offered
  • LimitFull limit available
  • RetentionLower
  • TermsDrift caught and re-rated mid-term
Insured B · Asserted
Periodic questionnaire
  • CoverAI exclusion applied
  • LimitReduced or declined
  • RetentionHigher
  • TermsPriced on a declared, unverified estate

Illustrative, to show the direction of the read. The carrier sets the rating, the limit and the retention against its own book; these are not Arkaya figures, not a quoted outcome, and not a promise of cover. Direction and mechanism only.

§ 05 · The test

The falsification condition.

The claim is falsifiable and held as a hypothesis: an evidenced counterparty obtains measurably better terms than an otherwise identical unevidenced one. The result is pending. The experiment is a carrier pilot, and the invitation is open to the desks that can run it. If the evidence does not move the terms, the thesis fails on its own stated ground.

§ 06 · How it starts

Four steps, each one evidenced.

01
First engagement
The board authors the Protocol and ranks the domains material to enterprise value.
02
First evidence record
The loop produces a signed record against obligation, in the eight-field format.
03
First underwriting decision
The carrier reads the record into rating, retention and limit at inception.
04
First measurable value
The renewal re-read shows trajectory, and the terms move with it.
The shape of the engagement
What you get, and what stays yours.

The deliverable is the evidence feed and the record read at the desk: first-party evidence of the AI estate, measured against an eligibility floor at inception and monitored across the term.

The record is the insured's. Portability is a schema property: evidence generated against the schema moves with the insured across engines, insurers and capital events without re-basing. No vendor, and not Arkaya, holds it captive.

The pilot is the §05 experiment run on a live desk: the floor at inception, the term monitored, the terms offered compared against the unevidenced book. If the evidence does not move the terms, the thesis fails on its own stated ground.

Detailed scope, implementation timelines and pricing sit in the post-NDA package: working session, sprint map, term sheet.

§ 07 · By audience

One schema, read where the capital decision is made.

The product is one; the buyer is three. Each reads the same evidence and prices a different decision.

Insurance sector · Layer 2
Price against evidence, not attestation

Underwriters, syndicates, brokers and reinsurers. D&O, cyber and W&I read against schema-conformant evidence at renewal, claim and exit. Affirmative AI cover and silent-exposure closure in scope.

Finance sector · Layer 2
Read governance at signing, and through the hold

Acquirers, refinancing lenders, PE sponsors and diligence advisers. Evidence read against debt covenants and SPA triggers, covenant surveillance through the holding period, pre-exit readiness.

Corporates · Layer 3
Build the premium before the event tests it

Boards, audit committees and risk functions. A Dynamic Risk Maturity Assessment and event-readiness work calibrated to the obligations your next capital moment will test, built to be read by insurers, lenders and acquirers. Detailed scope held under NDA.

Three roles, one operation

One buyer can hold more than one role: an insurer is a subject to its group board, a supervisor of its own coverholders, and a pricer at its desk.

Subject
Generates first-party evidence about itself. The corporate or CFO, the insurer, the portfolio company.
Supervisor
Consumes evidence across a delegated portfolio it is accountable for but cannot fully see. The insurance HoldCo board, the MGA aggregator, the private equity general partner.
Pricer
Reads a subject's evidence to price one risk or transaction. The underwriter, the lender, the acquirer.
§ 08 · What this replaces

One word does most of the work: first-party.

So the reader does not have to infer the distinction.

The market has priced surveyed state before

The factory mutual system has conditioned premium on engineering-surveyed controls since 1835. Telematics repriced motor in both directions. Cyber desks already buy external ratings, whose opaque scores the no-score discipline refuses. Continuous governance evidence extends a 190-year habit; it does not ask the market to form a new one.

Today's instrument
What it sees
The Arkaya difference
GRC and AI-governance platforms
One discipline at audit cadence.
Every discipline, read continuously, at the speed decisions are made.
Cyber-ratings and external scans
The perimeter, not the inside. The AI estate is carried by declaration.
First-party evidence of the insured's own estate, from inside.
The underwriting questionnaire
The AI estate only through example questions put to the applicant.
A measured estate, captured at source and read against obligation.
Rating agencies
A summary judgment, issued and trusted.
Observable primitives the counterparty prices itself. No score issued.

The single-domain AI governance platforms each optimise within the AI discipline at the cadence they inherited. None runs every governance discipline at the velocity the environment now sets.

What this is not

The boundaries of the product.

The discipline that calms a sophisticated reader is the explicit statement of what the architecture does not claim. Each line is enforced structurally, not asserted.

Not a regulatory replacement. The schema is referenced, not adopted. Supervisors are not displaced.
Not an audit opinion. Engines emit evidence against obligation. They do not certify accounts.
Not a continuous-compliance certification. The record shows behaviour against obligation, not a pass mark.
Not a governance score. No rating, benchmark or score is issued from Layer 1. Counterparties price.
Not a delegated underwriting authority. Pricing and the bind decision stay with the underwriter.
Does not replace board accountability. The board authors the Protocol and owns the decision.
Does not redefine accounting recognition thresholds. IAS 37 and ASC 450 stand. The schema surfaces the obligation earlier.
§ 09 · The retained share

Where retention is by design, it can be financed.

Not every exposure is transferred. The deductible and coinsurance every programme keeps is retained by design.

The underwriting platform · from Centinel 10
Contingent capital for the retained share.

The same evidence that keeps transfer available lets the share retained by design be financed as contingent capital, rather than absorbed by the balance sheet and left unprovided until it crystallises. The instrument heritage is XS Reserve, the excess-of-loss trade credit reserve that won a 2016 Business Insurance Innovation Award, now held within Centinel 10 Ltd.

Resilience Capital is built.
Not asserted.

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