Allianz Group, one of the world’s biggests insurance companies, has partnered with Symbiont to model a bilateral catastrophe swap on a blockchain. After the administrative components were completed, Symbiont demonstrated a fully modeled catastrophe swap in less than two weeks.
Catastrophe swaps offer concentrated exposure to insured weather disasters to risk seeking investors. The firms say that smart contracts can reduce the time and costs of managing catastrophe swaps, can lower the cost of issuance of insurance linked securities and provide a greater volume and diversity.
“Our mission has always been to work with partners who are equally dedicated and ready to deliver faster, more convenient services to our customers,“ said Fei Zhang, Head of Blockchain at Allianz SE. “Embracing blockchain and smart contract technology will be the latest example of Allianz’ long-standing tradition of innovation.”
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“Because we’re purpose-built for financial markets and don’t rely on open source, we didn’t have any issues capturing all of the features of these complex instruments,” said Louis Stone, Managing Director of Global Business Development at Symbiont. “We’re just scratching the surface of what Symbiont can provide for the global insurance markets.”
Back in March we reported that Ipreo and Symbiont are creating a new venture to overhaul the costly manual processing in the $3 trillion global syndicated loans market.