Nayms Issues World’s First Crypto-Denominated ILW
Nayms SAC Ltd., the leading crypto-native insurance marketplace, has announced the issuance of the world’s first crypto-denominated industry loss warranty (ILW). The ILW is provided through a segregated account on Nayms’ marketplace and offers retrocessional reinsurance protection to property reinsurers. The ILW covers US named windstorms above a loss trigger of $60 billion and uses USD Coin (USDC) as collateral on an Ethereum smart contract. The collateral is secured through new mechanisms, including a digital multi-signature process, for enhanced transparency and efficiency.
Key Points:
– Nayms’ ILW uses USD Coin (USDC) as collateral on an Ethereum smart contract.
– The ILW provides retrocessional reinsurance protection to property reinsurers.
– The ILW covers US named windstorms above a loss trigger of $60 billion.
– Collateral is secured through new mechanisms, including a digital multi-signature process.
– The ILW offers enhanced transparency and efficiency.
Prospero Re Partners with Nayms for the First Crypto-Denominated ILW
Prospero Re, a Bermuda insurer owned by Resolute Global Partners, has partnered with Nayms to purchase the world’s first crypto-denominated ILW. The ILW is denominated in cryptocurrency and has a loss trigger based on advanced catastrophe modeling technology. It provides coverage for severe losses and offers a transparent and efficient way for investors to access the property catastrophe market.
Opportunities in the ILW Market
The ILW market is part of the global property catastrophe reinsurance market, which generates over $300 billion of annual renewal premium. This presents significant opportunities for insurers, insureds, and investors. Nayms estimates potential incomes in prospective segregated accounts within its marketplace, including primary insurance for excess cyber liability, primary insurance for smart contract hack and cross-chain bridging failure, captive insurance for smart contract protection services, and captive insurance for digital asset recovery services.
Hot Take
Nayms’ issuance of the world’s first crypto-denominated ILW showcases the benefits of its business model and technology. This innovative approach provides insureds with access to alternative capital and offers investors a regulated yet uncorrelated return on their crypto investments. The use of cryptocurrency as collateral and the enhanced transparency and efficiency make this ILW a game-changer in the insurance industry. Nayms’ commitment to deploying emerging technologies to reshape insurance shows its dedication to driving innovation in the market.
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