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

Mar 23, 2021 | The Block News | 0 comments


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, Columbia, 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.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

News Source from TheBlockCrypto.com

Related Articles

Coinbase’s market debut weighs on other crypto industry stocks

Coinbase’s market debut weighs on other crypto industry stocks

Since making its much-anticipated market debut, Coinbase has performed mostly in the red and that appears to be weighing on some of its publicly traded peers.  The stock—which began trading on the Nasdaq on April 14—has declined from more than $410 a share to about...

Bitcoin tumbles 10% in 12 hours to trade below $50,000

Bitcoin tumbles 10% in 12 hours to trade below $50,000

Bitcoin is now down 23% from it's all-time high after quickly crashing below $50,000. The price of Bitcoin has fallen below $50,000 for the first time since March, with BTC shedding roughly 10% in the last 12 hours.On April 17, the $60,000 range was rejected, driving...

Pin It on Pinterest

Share This