Nayms SAC Ltd, the Bermudian-based crypto-native insurance marketplace, has announced the issuing of the world's first crypto-denominated industry loss warranty through the second segregated account or “cell” within its marketplace.

It said this type of instrument is index-based and used for providing retrocessional reinsurance protection to property reinsurers.

In this programme, Nayms said, it provides coverage for US named windstorm, attaching above a loss trigger of $60 billion.

The basic structure aligns with other ILWs, but Nayms said it innovates on the traditional approach by using USD Coin as the collateral within the segregated account on its independently audited Ethereum smart contract, and by securing that collateral through new mechanisms and concepts, including a digital multi-signature process, for enhanced transparency and efficiency.

David Verbeeten, chief commercial officer at Nayms, said: "This deal demonstrates so nicely the benefits of our business model and technology for a broad range of parties and opportunities.

“Notably, insureds gain access to alternative capital and investors can earn a return on their crypto that is fully regulated yet not correlated to most other financial instruments."

The purchaser is Prospero Re, a Bermudian-based reinsurer wholly owned by Resolute Global Partners.

For underwriting, Nayms said, it was assisted by the deep domain knowledge of Daniel Vestergren, CEO of Varius Capital Partners Ltd and former head of ILS at Hiscox Bermuda, who acted as general adviser.

Both the purchaser and Nayms were guided by Guy Carpenter, who acted as sole placing broker.

Tom Libassi, cofounder and managing partner of Resolute Global Partners, said: "We're proud to partner with Nayms to offer the first-ever property catastrophe reinsurance contract denominated in crypto currency.

“This contract is also the first ILW with a loss trigger based on the advanced catastrophe modelling technology behind our Footprint product, which provides coverage for severe losses along with a transparent, timely and highly efficient way for investors to access the property catastrophe market."

Nayms said the ILW market is part of the larger global property catastrophe reinsurance market, which generates more than $300 billion of annual renewal premium, presenting significant opportunities for insurers, insureds and investors alike.

Moving forward on the success of its innovative ILW, Nayms said, it remains committed to deploying emerging technologies to reshape the insurance industry.

Nayms is licensed in Bermuda for both general insurance and digital assets business.