The crypto-native insurance marketplace, Nayms SAC Ltd., has announced issuing the world’s first crypto-denominated industry loss warranty (ILW) through the second segregated account within its marketplace. This type of instrument is index-based and used for providing retrocession reinsurance protection to property reinsurers.
Through this program Nayms provides coverage for US named windstorms, attaching above a loss trigger of $60 billion. The basic structure is similar to other ILWs, but Nayms changes the traditional approach by using USD Coin (USDC) as the collateral within the segregated account on its independently audited Ethereum smart contract.
Dr David Verbeeten, Chief Commercial Officer at Nayms, commented, “This deal demonstrates so nicely the benefits of our business model and technology for a broad range of parties and opportunities. Notably, insureds gain access to alternative capital and investors can earn a return on their crypto that is fully regulated yet not correlated to most other financial instruments.”
Bermuda insurer, Prospero Re, wholly owned by Resolute Global Partners, is the purchaser who has a strong commitment to innovation. For underwriting, Nayms was assisted by market veteran Daniel Vestergren, CEO of Varius Capital Partners Ltd. and former head of ILS at Hiscox Bermuda, who acted as general advisor. For placement, the purchaser and Nayms were guided by Guy Carpenter, who acted as the sole placing broker.
Tom Libassi, Co-Founder and Managing Partner of Resolute Global Partners, said, “We’re proud to partner with Nayms to offer the first-ever property catastrophe reinsurance contract denominated in cryptocurrency.
“This contract is also the first ILW with a loss trigger based on the advanced catastrophe modeling technology behind our Footprint product, which provides coverage for severe losses along with a transparent, timely, and highly efficient way for investors to access the property catastrophe market.”
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