A catastrophic hurricane season has shed light on the reinsurance industry as it faces significant cost increases. Ted Georgas, co-founder and CTO of Nayms, a crypto-native reinsurance marketplace, said blockchain-based systems could dramatically reduce those costs.
Georgas explained that reinsurance is a mechanism where insurance companies transfer portions of their risk to other insurance companies, known as reinsurers – helping insurers manage their risk exposure, stabilize their financial performance, and maintain capital efficiency. Occurring with increasing regularity, high-intensity hurricanes have led to unprecedented claims,
The US Federal Emergency Management Agency (FEMA) has reported that policyholders of the National Flood Insurance Program (NFIP) have filed more than 54,000 claims following Hurricane Helene. As a result, primary insurers will likely face higher reinsurance costs, which may be passed on to consumers, reflecting the heightened risk environment shaped by extreme weather events. Universal Insurance Holdings expects to see a gross loss of up to $900 million following the three devastating hurricanes in the US.
“PwC data has indicated that blockchain solutions could remove 15-25% of expenses, delivering an industry-wide saving of $5-10 billion,” the Nayms CTO said. “As the insurance industry evolves, tokenization also offers a unique opportunity for institutional investors to diversify their investment portfolios and capitalize on the growth of traditional private market asset classes. This reduces disputes and simplifies compliance, as all parties have access to the same data.”
“Crypto innovations, particularly the use of stablecoins and tokenized assets streamline global transactions and enhance liquidity, crucial in a market that often involves large, cross-border payments. Smart contracts facilitate automated claims processing, eliminating intermediaries and cutting administrative costs. Some reinsurance firms are even exploring decentralized insurance protocols, where investors can pool capital to back specific risks, democratizing reinsurance investment.”
As a crypto-native (re)insurance marketplace, Georgas said Nayms is on a mission to create a fair and transparent financial system while proactively shaping the future of on-chain finance. Ultimately, they aim to transform the tokenized asset industry by bridging traditional insurance markets, insurtech, and blockchain technology, unlocking access to over $2 trillion in alternative capital through the tokenization of real-world insurance programs.
“By accepting both stablecoins and fiat as collateral, Nayms broadens this access, fostering diversification and transparency within the financial system,” Georgas said. “As the first platform of its kind and one of the few regulated in both digital assets (DABA Class F) and insurance (IIGB) under the Bermuda Monetary Authority (BMA), Nayms combines regulatory expertise with innovation to shape the future of decentralized finance and asset tokenization. Earlier this year, (we) launched an industry loss warranty (ILW) contract on Coinbase Ethereum L2 Base, which allowed for a Bermuda-regulated segregated account structure reinsuring against certain weather-related catastrophic events in Florida.”
NAYM, the governance token of the Nayms Marketplace, designed to capitalize the Nayms Liquidity Facility (NLF), has also recently launched. The NLF functions as a third-party capital provider, selectively offering capital to insurance programs underwritten by Nayms. Through these investments, the NLF seeks to earn distributions, which are reinvested to generate rewards for NAYM token holders. Holders of NAYM can actively engage in governance by participating in proposals, discussions, staking, and voting. Active involvement in the governance process not only contributes to the positive performance of the marketplace but also allows participants to receive rewards from the NAYM governance pool.
“Nayms offers investment opportunities in (re)insurance for property and casualty (P&C) risks, including cyber, errors and omissions, directors and officers coverage, crime, and various industry loss warranty products,” Georgas said. “This type of exposure is typically reserved for pension funds, private equity funds, and other major institutional investors. Now, through tokenization, they are making it accessible to all qualified investors, creating an entirely new market dynamic.”
Built on Ethereum and Base, Nayms uses smart contracts to enable on-chain insurance placement and crypto-native transactions for collateral, commissions, premiums, and claims.
