Some news from the USA;
Re, the world’s first blockchain-powered reinsurer, today announced significant growth in the first quarter of 2023. The company, launched in late 2022, already backs $34 million in premiums and tens of thousands of small businesses across a broad range of industries. With a robust deal flow pipeline, more growth and significant opportunities are anticipated as additional capital becomes available.
“Re is at the crossroads of a generational opportunity for the emergence of a new reinsurance marketplace, one with a highly curated portfolio of insurance risks without a legacy of catastrophic risk exposure (hurricanes, earthquakes, etc.), built differently to take advantage of a rising interest rate environment and premium rate hikes across the insurance industry. We’ve been afforded solid economics right out of the gate and an opportunity to build something truly new into the reinsurance market,” said Karn Saroya, CEO and co-founder.
Re has built a protocol akin to a decentralized Lloyd’s of London. Through Re, alternative capital providers back baskets of insurance policies to earn premiums and yield. Re’s smart contract protocol is built upon the Avalanche blockchain. Being on-chain creates greater transparency and flexibility using the fastest smart contracts platform in the industry. It also allows the company to remain lean, with only seven full-time employees.
“There is significant operating leverage in our business. We’re focused on automating policyholder data and claims via our blockchain pipeline to gain an administrative expense advantage over traditional reinsurers,” adds Saroya. “Working with distributed teams on underwriting, pricing and origination keeps operating expenses low without compromising service. We have the ability to scale upwards of $500M in premium using our small team and the resources we have today.”
Blockchain technology continues to evolve rapidly, and Re is proving the potential for innovation. There is a demand for blockchain technology to create more secure and transparent insurance policies. Regulators can query risks and programs on-chain and the capital backing those deals at any time. None of this is possible with traditional reinsurance providers.
Historically, reinsurance investments were limited to institutional capital providers. Re widens the access to the reinsurance market through tokenization and transparency. Insurance companies are looking to run their businesses more efficiently, quickly, and accurately. Solving these needs can only happen through innovation. Through Re, regulators, coverholders and capital providers can now observe surplus capital positions and salient reinsurance program performance being emitted to public blockchains in real-time. This is already driving an increase of alternative capital into the industry and consolidating access to data that has lived mostly in spreadsheets or third-party contributory databases.