Bankless
How Re is Rebuilding the $1T Reinsurance Market with Stablecoins | Karn Saroya & Avichal Garg
- Re is building an on-chain reinsurer backed by stablecoins, currently supporting 35 insurance carriers with ~$500 million in business, targeting $1 billion in annual premium by early 2025.
- Blockchain and smart contracts enable **transparent, real-time capital attestation** for solvency and regulatory compliance—solving a centuries-old insurance problem more elegantly than traditional opaque capital pools.
- The $1 trillion annual global reinsurance market is being accessed via **stablecoin capital markets**, allowing retail and institutional holders to earn 12–14% yields on uncorrelated insurance risk (auto, home, workers' comp).
- Re operates as a regulated fintech (Cayman Islands) with DeFi infrastructure on Ethereum; capital is segregated in trust accounts, with leverage ratios of 5–7x enabling high yields while maintaining safety through law of large numbers.
- Governance token (RE) emulates Lloyd's of London (330-year-old insurance marketplace), controlling acceptable counterparties, lines of business, and capital allocation across the network.
- The product is already composable with DeFi—deposits earn yield via senior (2.5% above risk-free) and junior tranches (8.5% above risk-free), and users can loop positions on Morpho and Fluid for 18–22% returns.