Re, a blockchain-powered reinsurance company, raised $14 million in seed-round funding to build a decentralized system that aims to fill a function similar to the Lloyd’s of London insurance market, the company said in a statement Wednesday.
Tribe Capital, Defy, Exor, Stratos, Framework, Morgan Creek Digital and SiriusPoint participated in the round, alongside a number of angel investors.
Built on the Avalanche blockchain, Re’s protocol allows retail investors and cryptocurrency holders a way of backing insurance policies. The reinsurer works with underwriting teams, known as syndicates, to evaluate the financial merits of insurance programs brought to the protocol, it said.
“We’re building a decentralized global insurance transaction layer that settles any kind of insurance risk in a way that’s transparent to regulators, partners and investors,” CEO Karn Saroya said in a statement.
Re has assessed more than $300 million in potential premium from insurance programs, it said, and will use the new funding to expand its reinsurance underwriting pipeline. The company is looking for underwriters and actuaries to apply for syndicate roles on the protocol, and has already appointed Joe Gaito and Jason Hoffman of Freedom Re Underwriters as its first independent syndicate.
David Hampson, former CEO of Willis Programs – a unit of global insurance broker Willis Group Holdings – has joined the company as a strategic adviser and independent board member, Re said.
“For members who provide capital, they earn uncorrelated yields that are comparable to high yield fixed income,” Saroya said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.