The chief executive of a reinsurance company has suggested that the sector could soon move onchain.

Oxbridge Re’s Jay Madhu says tokenised reinsurance is closer than many expect because more corners of traditional finance are experimenting with tokenisation.

Oxbridge Reinsurance Limited is a Cayman Islands-licensed reinsurance entity that focuses on the US Gulf Coast property and casualty market.

The company offers tokenised real-world assets as tokenised reinsurance securities and reinsurance business solutions to property and casualty insurers. This is done through its subsidiaries, SurancePlus Inc, Oxbridge Re NS and Oxbridge Reinsurance Limited.

Insurance businesses in the Gulf Coast region of the US purchase property and casualty reinsurance through the company’s licensed reinsurers, Oxbridge Reinsurance Limited and Oxbridge Re NS.

The company said its Web3-focused subsidiary, SurancePlus Inc, has developed the first “onchain” reinsurance RWA of its kind to be sponsored by a subsidiary of a publicly traded company.

A statement said that by digitising interests in reinsurance contracts as onchain RWAs, SurancePlus has democratised the availability of reinsurance as an alternative investment to both US and non-US investors — all achieved without the use of leverage.

Mr Madhu, who is also the funder and chairman of Oxbridge Re Holdings, told TheStreet Roundtable of his belief that the movement is not very far behind.

He said that access to capital is the central force shaping reinsurance pricing and, therefore, the cost of home insurance for everyday consumers.

“Constraint to capital is what drives prices,” he said, pointing to Florida as a prime example. Insurers in the state currently pay about 45 cents on the dollar for reinsurance coverage, a cost that ultimately flows through to homeowners in the form of higher premiums.

If access to reinsurance capital were broadened through tokenisation, Mr Madhu believes pricing could fall.

Two things will happen, he said. The investors who are investing in reinsurance will make a good return, and the general public will also benefit, he added.

By opening the asset class to a global pool of investors, he contends that blockchain rails could “even the playing field”, reducing friction and expanding participation beyond traditional institutional players.

Still, he emphasised that compliance and transparency remain non-negotiable.