Note from the Publisher: We write about blockchain and its many uses frequently, plus all other things fintech, but I learned something new today. First, there is such a thing as a Catastrophe Risk Exchange in NYC, and second, they trade catastrophe swaps, which according to BusinessDirectory.com are an “(o)ption contract used by investors to exchange (swap) a fixed payment for a certain portion of the difference between insurance premiums and losses caused by claims”. So, that’s part one of the story. Part two is that these contracts will soon be transacted, in part, through blockchain technology. As we’ve mentioned before, and write about in another story appearing on the site today, blockchain’s uses are many, and it almost feels like the beginning of the internet, where we were all trying to figure out what you could do with this new thing, back in the 90’s.
“A catastrophe swap software platform based on the blockchain is ready for use, according to the developer of the technology which featured in the pilot catastrophe swap undertaken between Allianz and Nephila Capital recently, Symbiont.
Blockchain image, from ZDNetSymbiont has developed a “smart contracts platform for institutional uses of blockchain technology” one of the first of which was the ground-breaking catastrophe swap transaction between insurance giant Allianz and reinsurance and ILS investment manager Nephila Capital.
In terms of insurance technology (or Insurtech), this is the disruptive end of the spectrum, where technology and software can enable capital to be more closely connected with insurance or reinsurance risks.”