Blockchain-powered reinsurer Re backs $34 million in first-quarter premiums

Re, a blockchain-powered reinsurance company, has reported “significant” growth in Q1 2023, supporting $34 million in premiums and insuring tens of thousands of small businesses across various industries since launching in late 2022.

The company envisions further growth and opportunities with a strong deal flow and additional capital injection, noted Re.

In October 2022, Re raised $14 million in seed-round funding to build a decentralized system for investors that will allow them to gain exposure to “a massive and uncorrelated asset class” that is insurance premiums.

Re has developed a decentralized protocol that works in the same way as Lloyd’s of London. The company allows alternative capital providers to invest in baskets of policies to generate premiums and returns, the reinsurer said.

Built on the Avalanche blockchain, Re’s smart contract protocol provides 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 contract 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 such as hurricanes and earthquakes, providing solid finances and the opportunity to build something truly innovative in the market.

“There is considerable operational influence in our business. We are focused on automating policyholder data and claims via our blockchain pipeline to gain an administrative cost advantage over traditional reinsurance companies,” said Saroya.

“Working with distributed teams on underwriting, pricing and origination keeps operating costs low without compromising service. We have the ability to scale upwards of $500 million in premium using our small team and the resources we have today,” Saroya added.

Re demonstrates the potential of blockchain technology to create secure and transparent insurance policies, meeting the growing 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 support agreements at any time, the reinsurer noted.