[RWA platform relaunches tokenized reinsurance fund on Avalanche, Nexus Mutual commits $15 million]
Re CEO Karn Saroya said in an interview that Re’s new fund will invest in low-volatility insurance, including property, truck, aviation and workers’ compensation insurance, and exclude catastrophic risks. Re aims to invest $200 million in premiums by the end of the year, with another $3 billion in the process. The company also raised $7 million in a venture capital investment round led by Electric Capital.
Re, a real estate asset (RWA) platform specializing in tokenized reinsurance, announced on Tuesday that it has opened its first open-end reinsurance fund on the Avalanche (AVAX) network. The fund’s first investors include crypto insurance alternative provider Nexus Mutual, which allocated $15 million, and Ava Labs’ RWA-focused fund Vista, which made smaller deposits.
Re previously raised $14 million in a seed round in late 2022 and raised a further $7 million in its latest funding round. Re was regulated in the Cayman Islands to introduce blockchain technology to the traditional insurance industry, hoping to become a decentralized version of Lloyd’s of London.
Reinsurers provide protection to insurance companies, charging premiums to cover certain types of risks. Saroya said in an interview with CoinDesk that reinsurance, with nearly $1 trillion in annual premiums, is the cornerstone of financial markets and commerce. He described it: "Reinsurance is the ocean, and insurance companies are the boats floating on the water."
Bringing these assets to the blockchain can improve settlement, increase operational efficiency and increase capital reserve transparency. This is in line with the trend of digital asset companies and global financial institutions such as BlackRock, Citigroup and Franklin Templeton tokenizing old-style investments and trading them on the blockchain.
Re's new fund invests primarily in more conservative insurance categories, such as property, truck, aviation and workers' compensation insurance, excluding catastrophic risks. The fund aims to provide investors with annualized returns of up to 23% and is open to U.S. accredited investors and all investors outside the U.S. who complete Re’s know-your-customer (KYC) process. The minimum deposit lock-in period is one year, and the funds are available for redemption after the insurance company releases the collateral.
Saroya said investing in the fund is similar to high-yield fixed income and is attractive to decentralized autonomous organizations (DAOs) and ecosystem funds deploying capital.
