Danish Red Cross launches $3 million blockchain-based volcano disaster relief bond

advertisement

The Danish Red Cross has launched a blockchain-based "catastrophe bond" for volcano-related disasters, according to an announcement from the insurance group Howden. 

The bond, worth $3 million, aims to facilitate disaster relief to affected areas if 10 specified volcanoes erupt. The chosen volcanoes are in Cameroon, Chile, Colombia, Ecuador, Guatemala, Indonesia and Mexico. 

Replexus, a UK-based firm that securitizes insurance risk, provided the blockchain application. "The volcano CAT bond will be placed on an insurance-linked securities (ILS) blockchain, making the transaction particularly cost-effective for the aid agency and enabling secondary market trading among ILS investors,” Replexus founder and CEO Cedric Edmonds said in a press statement.

Howden and risk modeling agency Mitiga Solutions also helped the Danish Red Cross create the bond. 

The system uses a model that can "anticipate the trajectory of the volcanic ash cloud using prevailing winds," according to Mitiga CEO Alejandro Marti. If the model determines that ash is going to fall on toward vulnerable communities, the bond will automatically start a pay-out using Mitiga Solutions' trigger mechanism, according to the announcement. 

Investors in the new bond include Switzerland-based Plenum Investments, UK-based investment manager Schroders and the Swiss insurance investment advisor Solidum Partners.

Related Reading

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Layer-1 Platforms: A Framework for Comparison

The Block Research was commissioned by Algorand to create Layer-1 Platforms: A Framework for comparison, which provides a “look under the hood” at seven platforms: Algorand, Avalanche, Binance Smart Chain, Cosmos, Ethereum/Ethereum 2.0, Polkadot, and Solana. We assess their technical design, related ecosystem data, and qualitative factors such as key ecosystem members to get an understanding of how they differ. Having done this analysis, we draw some insights for what the future of the broader smart contract landscape could look like for years to come. 
Read Full Story
Aug 11, 2021, 5:18PM UTC
More