Re, a blockchain-powered reinsurance company, has reported “significant” growth in Q1 2023, backing $34 million in premiums and insuring tens of thousands of small businesses across various industries since its launch in late 2022.
The company foresees further growth and opportunities with a strong deal flow pipeline and additional capital influx, Re noted.
In October 2022, Re raised $14 million in seed-round funding to build a decentralised system for investors which will allow them to gain exposure to “a massive and uncorrelated asset class” that is insurance premiums.
Re has developed a decentralized protocol that operates similarly to Lloyd’s of London. The company allows alternative capital providers to invest in baskets of insurance policies to generate premiums and yields, the reinsurer said.
Re’s smart contract protocol is built on the Avalanche blockchain, providing increased transparency and flexibility, as well as the ability to operate with just seven full-time employees. With its on-chain infrastructure, Re is able to remain lean and efficient, using the fastest smart contracts platform available.
According to CEO and co-founder Karn Saroya, Re is in a unique position to create a new reinsurance marketplace that benefits from rising interest rates and premium rates across the industry. The company’s portfolio is carefully curated to avoid catastrophic risks like hurricanes and earthquakes, providing solid economics and the opportunity to build something truly innovative in the market.
“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,” Saroya said.
“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,” Saroya added.
Re shows the potential for blockchain technology to create secure and transparent insurance policies, meeting the increasing demand for these features. Unlike traditional reinsurance providers, Re’s use of blockchain allows for on-chain data access, enabling regulators to query risks, programs, and capital backing deals at any time, the reinsurer noted.