Cerchia launches peer-to-peer direct risk transfer digital platform

Swiss-headquartered fintech Cerchia has now announced the launch of its awaited capital markets focussed direct risk transfer platform, a peer-to-peer digital tool that allows protection buyers to access institutional capital providers with no middlemen required.

Cerchia had raised seed funding at the start of this year to finance the ongoing development and first product launch of its capital markets direct risk transfer platform.

The digital risk transfer marketplace, called DRT^TM (Direct Risk Transfer), is designed to provide efficient risk transfer between insureds, be they insurance or reinsurance firms, corporate risk transfer buyers, other protection seekers such as multinational organisations or sovereigns, and capital market institutional investors.

It’s been created using a blockchain technology platform known as Avalanche, designed as a decentralized application (dApp).

“We are proud to launch our direct risk transfer marketplace DRT^TM on the Avalanche C-Chain,” Michael Rey, CEO and co-founder of Cerchia explained.

“Together, we are revolutionizing the risk transfer landscape by making risks investable and contributing to a resilient world by reducing the $2 Trillion protection gap.”

The idea is to provide direct access to the capital markets for risk transfer, connecting risk and capital without middlemen and allowing counterparties to trade efficiently together.

Counterparties can set the risk transfer parameters they want, in line with their risk protection and investment needs, while parametric event triggers can be used from a wide-range of perils.

The digital platform provides for automated deal monitoring and payouts, with contracts settled automatically using smart contract technology.

Cerchia has insurance-linked securities (ILS) expertise within its team, as former Twelve Capital founding partner Sandro Kriesch is a senior advisor and former Plenum Investments director Erwin Zimmermann is a board director.

Dr Fabian Bachmann, COO and co-founder of Cerchia, added, “We are very pleased to launch our DRT^TM platform on Avalanche by leveraging its sub-second transaction finality and seamless handling of high transaction volumes, which is key to scale our platform.”

Cerchia is not the first to utilise smart contract technology within the reinsurance and insurance-linked securities (ILS) sectors, but the company is seeking to make onboarding easier, as transactions can be entered into a settled off chain.