Host: All right, we're back and we're live from Definition at Token 2049 Singapore. It's where institutions and builders and tokenized credit yield and stablecoins meet. Of course, it's powered by Accountable. They're a verification layer bringing institutional finance on chain. And joining me right now is Ayan Rahman, co-founder and chief strategy officer of Henri, which is bringing the reinsurance market on chain. Ayan, welcome to FinTech TV.
Ayan Rahman: Thank you so much for having me.
Host: So how about we start with the basics? What is Henri, and what led you to build a reinsurance company on a blockchain?
Ayan Rahman: Yeah, absolutely. So I think we have to start off with what reinsurance is. I think, you know, this concept is, like, very secluded from, like, the majority of investors that are allocating across the globe today. So to put it very simply, reinsurance is insurance for insurance companies. What it is is really just simply a risk transfer product. Our fundamental focus is being able to underwrite property catastrophe reinsurance. So we are underwriting risk transfer on the basis of large peak perils all across the globe. So think about your large US hurricanes, US earthquakes, Japan typhoons, European windstorms, things of those nature, and that's sort of the risk that we're underwriting and we're focusing on bringing to the markets. In terms of the idea of bringing reinsurance on chain, really from a perspective of the business, it's not changing much, right? We are still a licensed and regulated entity out of Bermuda that's operating and completing deals as any other traditional reinsurer would. By bringing that asset on chain, we're now bringing a market that has been historically inaccessible to people beyond pension funds and private equity firms to be able to access that asset class in a manner where it's 24/7 tradable. Anyone can hold it, utilize it, and be able to perform a bunch of other things in DeFi, right?
Host: And this leads perfectly into my next question because reinsurance is a huge market that most investors don't get to touch, basically. Why do you believe that it belongs on chain?
Ayan Rahman: I think it's the quality of the asset itself that allows for it to be a sustainable collateral asset on chain. I think the problem that we've seen historically with a lot of DeFi yields is that they're purely driven by emissions. They're purely driven by incentives. They're driven by a lot of crypto market volatility where you're waiting for arbitrage opportunities based off funding rates. You're waiting for interest rates to be able to drive up, to be able to run delta-neutral strategies. Inherently, the way that you look at reinsurance is that it's sustainable for long durations of time, and then the underwriting is focused on that one bad event, right? You're getting paid to underwrite risk on the basis of if there's a major hurricane, if there's a major earthquake, what sort of structures and layers do you have in place, and that's what you're being paid to underwrite.
Host: And when you thought about, you know, where it should be, you chose to build it on Solana. What made it the right home, and how does your token connect with the rest of DeFi?
Ayan Rahman: So I think the benefit of having a tokenized RWA is that it allows for faster feedback loops. So the benefit of it being on Solana is that because of the nature of the network itself, you can quickly see what are the things that investors are most interested in. How can they utilize the capital? Are they effectively trading it? Are they utilizing it on certain venues? That feedback loop allows us to prioritize which venues we want to distribute the asset to. So the second component, which is the second part of your question, is distribution really is king, right? And so for us, we decided that, OK, NYC is this asset that can generate anywhere between 10 to 12% in yield over a year period, and our goal is to be able to bring that into borrow-lend protocols first. Why? Because we want people to deposit that, being able to borrow against it to run various strategies allows for more capital efficiency, knowing that a collateral asset is earning yield while you do other things across the ecosystem, right?
Host: And Henri is a licensed insurer. So how does that regulation protect the people who hold actually your token?
Ayan Rahman: Yeah, I think this has been something that always really interested me, is the fact that the regulatory body that we're governed by, Bermuda, has a lot of forward-looking principles and foundations that they're trying to set forward when it comes to crypto and digital asset adoption. We like to pride on the fact that we have a lot of pride on the fact that we are being able to issue a token, not as just a fund. We are the regulated reinsurer that's issuing a token, and that allows for people to receive what's called, like, a participation agreement, which provides them a claim towards the underlying assets that are backing the portfolio, insurance contracts that we're underwriting. So I think that gives a lot of confidence to investors to know that, hey, if there were something to happen, we can go directly back towards Henri, redeem our tokens if we're KYC, and then being able to actually have a claim of the underlying value of the portfolio.
Host: Amazing. Ayan, it's been great having you with us. Thank you for joining us on FinTech TV.
Ayan Rahman: Appreciate it, appreciate it so much. Thank you.
