The Future
of Reinsurance.

We begin with two primitives: the Peril-Specific Catastrophe Token (PSCT) and the Building Token (BT). On the Riskify platform, the PSCT serve as the base unit of risk, representing $1,000 of a peril exposure. We track states of events and PSCT issuance through our second primitive, the non-tradable Building Token (BT) that tracks real assets.

To create tokenized reinsurance structures, we collate PSCT together to make tradeable Risk Pool Tokens (RPTs). RPTs behave like a traditional reinsurance contract with set attachment points based on number of burned PSCTs in the pool. To make the environment more liquid, we introduce Peril Activated Derivatives (PAD). These are tradable derivatives for hedging and enhanced market participation for non-insurers.

Now how can we make risk sharing more collaborative so that offers are more enticing for counterparties? On the Riskify platform, PSCT and RPT can be used as building blocks to create Cross-Pool Tokens (XPT) for collaborative risk sharing and distrubution. It is analogous to an insurance reciprocal but tokenized and positions tradeable.

To ease participation and reduce market fragmentation, unmet positions of RPT and XPT can be bundled together into Bundle, a composite token for diversified participation akin to an index fund. Just as bundles can be forked from RPTs and XPTs, the Riskify ecosystem allows users to fork these assets into derivatives called PAD can be used to hedge against the risk of a specific peril.

Asset tokenization flow: BT branches into PSCTs; RPTs and XPTs can create PADs for enhanced risk management; RPTs and PSCTs can create XPTs for collaborative risk sharing; RPTs and XPTs together can flow into Bundle.