Extraordinary Re, Nasdaq Partner On Blockchain Insurance Risk Trading Platformbr>
Extraordinary Re, a startup focused on the reinsurance industry, has teamed with exchange operator Nasdaq to launch a new blockchain trading platform that will allow institutional investors to buy and sell exposure to insurance risk.
Founded in 2013, Extraordinary Re is building a system to handle a broad range of insurance liabilities and make them available and attractive to institutional investors. It is creating a new way for insurers, reinsurers, and managing general agencies to access capacity from the Insurance Linked Securities (ILS) market.
Under the agreement, Nasdaq will supply matching engine technology through its Nasdaq Financial Framework architecture. Extraordinary Re will deploy this technology through its patented Liquid Insurance Contract risk allocation platform. It will operate its system on a private cloud and leverage blockchain technology to transmit flow-through information to its participants. The company currently plans to go live with its technology platform in the summer of 2018.
The platform will let insurance companies create “liquid insurance contracts” that will allow institutional investors to buy and sell shares of insurance liabilities. Investors will be able to create portfolios of liabilities on the platform using combinations of contracts, giving them a share of the insurance premiums, but also exposing them to potential losses if the underlying policies are triggered.
“The agreement with Nasdaq is an important milestone in our go-to-market plan,” explained Will Dove, Chairman and CEO of Extraordinary Re. “Our innovative structure and technology will deliver new classes of risk to investors through a platform powered by Nasdaq’s market-leading technology.”
“We are very enthusiastic about the opportunity that Extraordinary Re brings to the capital markets, in particular, for institutional investors and the global reinsurance market,” said Paul McKeown, Senior Vice President, Market Technology, Nasdaq. “By providing the technology to run this new platform, Nasdaq is expanding beyond traditional market operators in powering price formation between buyers and sellers in a completely new asset class. We look forward to supporting Extraordinary Re in their creation of a unique, groundbreaking, new platform.”