Harneys and dropRWA Plan to Issue Tokenized Catastrophe Bonds in Early 2027

Harneys and dropRWA plan to issue tokenized catastrophe bonds in early 2027, with each token representing legal ownership of the catastrophe bonds. Catastrophe bonds allow insurance companies to transfer the financial risks of natural disasters to capital market investors. According to data from Swiss Re, natural disasters caused $220 billion in economic losses last year, with insurance covering only $107 billion. As of June this year, the outstanding size of the catastrophe bond market reached $65.6 billion, with new issuances in the second quarter totaling $11.3 billion, setting a record for a single quarter. This tokenization scheme aims to lower investment thresholds, considering structures that can accommodate smaller beneficiary rights, while still adhering to securities, insurance, and investor protection regulations. Henry Tucker from Harneys stated that the tokenized structure will ensure that funds are used to cover specific insurance risks, particularly in regions like Southeast Asia, where risks such as floods and typhoons are prevalent.

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