#crypto and #insurance can lead to new means of risk financing. One way of financing the risk is to introduce a new token for risk. This would be a universal currency of insurance applicable to any risk. This would change how we price risk.

Imagine $RISK. It's a new token that is linked to a base of capital. This token is purchased by players that are looking for insurance. The token would be linked to a #smartcontract with parametric triggers. This means upon X event Y indemnity is paid out. No adjuster.

With this autonomous claims model in place, we can offer the insurance anywhere in the world. Incoroporate in the Cayman/Turks and get an insurance license. Then offer the coverage for the covered even (windstorm/hail damage/travel insurance) via fully digital platform.

The coverage is only procured via $RISK and claims are paid via $RISK. This creates an ecosystem of risk transfer with a currency devoted to pricing risk. Each token can be broken down infinitely, allowing actuaries are price out the quanta of risk.

Third parties can trade $USD for $RISK and spend the currency a la $BTC or $ETH. We now create a global demand for risk. The fewer the claims, the more valuable the $RISK. Of course, short sellers would create a moral hazard.

We can accommodate for the moral hazard by denying claims where evidence suggests that there was fraud or lack of reasonable risk management. This would need to be fair & done via bot or third party data. We want as few humans in the system as possible.

What's cool about this is that we've got an opportunity with parametric covers & smart contracts to create fully autonomous claims departments. Paired with a #cryptocurrency we can create a worldwide market for risk management.

In years where there are light claims, then $RISK tokens' value skyrockets. In years with heavy claims, then the $RISK tokens are less valuable.

But how do we invest surplus and reserves?

Very simple: the purchase of every $RISK insurance policy will be held in a basket of #cryptocurrencies including $BTC, $LITE, $ETH, and others that make sense.

No front. No rated paper. Non-admitted coverage available literally anywhere on the planet. This is possible for windstorm (parametric claimspaid via wind speed measurements from anemometer). Crop or wildfire also good (satellite confirmation of triggering event).

In other words, many types of property insurance coverages could be completely digitized and offered via worldwide, non-admitted insurance carrier.

Long term effects are numerous. But one would be to replace the ILS bond market with $RISK tokens.

@brendan_snow @ayayrongreen @InsuranceEleph1 @Nick_Lamparelli @Broker_Brett @BrettEnder @light_townsend @APereaSr @adam_shniderman @insurancewriter @GrinchInsurtech @InsurTechEd @InsuranceGenY @Backstop_Insure @HarrisonWicker @robgalb