XL Group has announced the creation of a new venture capital initiative, XL Innovate.

XL Innovate will be financially backed by XL and will invest in companies that have a strategic focus on developing new capabilities in the insurance sector, according to a statement from XL. The fund will take equity positions in companies that provide new market opportunities for XL throughout the world.

XL CEO Mike McGavick said the new initiative “will extend XL’s capabilities in existing markets and give us new opportunities to address some of the most pressing and complex risk problems in the global economy.”

The new fund will be led by Tom Hutton, managing partner and director. Hutton, a past director of XL, most recently served as the CEO and founder of New Energy Risk Inc., a provider of data analytics, strategic consulting and financial risk transfer solutions to the renewable energy industry worldwide, which partnered with XL last year to launch an innovative fuel-cell insurance product.

Hutton’s past experience includes CEO of Risk Management Solutions Inc., CEO of White Mountains Re, and director of private and public insurance and reinsurance companies including Montpelier Re and Safeco.

The XL Innovate board of directors will include Sarah Street, currently XL’s chief investment officer. Street will be stepping into a new role at XL focusing on innovation efforts and strategy initiatives following the close of XL’s proposed acquisition of Catlin Group Ltd.

Greg Hendrick, currently chief executive of Insurance Operations at XL, who after the close of the proposed Catlin transaction will become chief executive of XL’s Reinsurance Operations, will also be responsible for XL’s involvement in the XL Innovate activities—helping connect XL Innovate’s portfolio companies to XL’s clients, brokers and underwriting.

XL is not the only insurer involved in funding innovations.

American Family Ventures, the direct venture capital arm of American Family Insurance, makes early stage investments in emerging technology companies as part of its commitment to proactively protect policyholders. American Family teamed up with Microsoft Corp. to launch a business accelerator for startups focused on home automation last year.

AXA announced the launch of €200 million ($291 million) venture capital fund backing startups bringing innovations to the insurance, asset management, financial technology and healthcare service industries in February 2015.