We are live from Definition by Accountable at Token 2049 Singapore. Joining me is Ayyan Rahman, Co-Founder and Chief Strategy Officer of OnRe, which is bringing the reinsurance market on-chain. Ayyan, welcome to the show. How about we start with the basics — what is OnRe and what led you to build a reinsurance company on a blockchain?
We have to start with what reinsurance is — this concept is quite secluded from the majority of investors allocating across the globe today. Simply put, reinsurance is insurance for insurance companies. It is a risk transfer product. Our fundamental focus is underwriting property catastrophe reinsurance — risk transfer based on large peak perils across the globe. Think large US hurricanes, US earthquakes, Japan typhoons, European windstorms. By bringing that asset on-chain, we are bringing a market that has been historically inaccessible to people beyond pension funds and private equity firms — to anyone who can hold it, utilise it, and perform a bunch of other things that DeFi allows. We are still a licensed and regulated entity out of Bermuda completing deals as any other traditional reinsurer would. The asset just now lives on-chain.
Reinsurance is a huge market that most investors do not get to touch. Why do you believe it belongs on-chain?
It is the quality of the asset itself that allows for it to be a sustainable collateral asset on-chain. The problem with a lot of DeFi yields historically is that they are purely driven by emissions, purely by incentives, by crypto market volatility — waiting for arbitrage opportunities, waiting for interest rates to drive up to run delta neutral strategies. Reinsurance is sustainable for long durations of time. The underwriting is focused on that one bad event — you are being paid to underwrite risk on the basis of if there is a major hurricane or a major earthquake, what structures and layers do you have in place? That is what you are being paid for.
You built OnRe on Solana. What made it the right home?
The benefit of having a tokenised real world asset on Solana is the faster feedback loops. Because of the nature of the network, you can quickly see what investors are most interested in, how they utilise capital, whether they are trading it or using it on certain venues. That feedback loop allows us to prioritise which venues to distribute the asset to. Our token can generate anywhere between 10 to 12% in yield over a year. Our goal is to bring that into borrowing protocols first — so people can deposit it, borrow against it, run various strategies, and allow for more capital efficiency, knowing that a collateral asset is earning yield while they do other things across the ecosystem.
OnRe is a licensed insurer. How does that regulation protect token holders?
The Bermuda regulatory body has a lot of forward-looking principles around crypto and digital asset adoption. We are proud that we are not issuing a token as just a fund — we are the regulatory reinsurer issuing the token. That allows people to receive a participation agreement, which provides them a claim towards the underlying assets backing the portfolio or the reinsurance contracts we are underwriting. If something were to happen, they can go directly back to OnRe, redeem their tokens if KYC’d, and actually have a claim on the underlying value of the portfolio.
You have said liquidity has to be treated as a core risk input from day one. What does that look like in practice?
The problem with most real world assets is that they tokenise the asset but do not change the asset to fit within the world of decentralised finance or what markets expect. The number one request from people is liquidity. With OnRe, from the start we have thought a lot about how to entertain liquidity and change the structure of the asset because we are tokenising it. We as the issuer have a responsibility to change the structure of the way the business is done. So we keep 15 to 20% of our book liquid. That allows the market to have confidence that a certain level of liquidity is available for them to trade in and out of or scale their exposure.
There are a lot of crypto investors new to reinsurance. How do you help them understand what they are buying?
The education process is really hard — it would probably take about an hour to go through the whole book we are underwriting. What allows us to scale and give markets confidence is that we are working with Accountable — providing proof of solvency for all the backing assets behind our token, whether it is sitting in a Bank of New York Mellon Trust or on-chain in our multisig infrastructure. Verifying data and information is a huge piece. And from an education perspective — that is our responsibility. We need to be out there helping people understand loss scenarios and what their net exposures could look like as a lender or borrower.
Ayyan, it has been great having you with us. Thank you for joining us.
Thank you. Appreciate it so much.
