We were thrilled at D1Conf to host Ensuro, an innovative (re)insurance protocol that brings blockchain-powered reinsurance to the forefront. Guillermo Narvaja, Ensuro’s CTO and co-founder, shared Ensuro’s story.👏 Why are we excited about Ensuro?Founded in 2021, combining regulatory compliance, innovative risk pooling, and blockchain transparency, Ensuro addresses critical challenges in the insurance industry.Through a collaboration with Ensuro, launching and distributing products on the Etherisc platform can become easier than ever before. A collaboration overcomes two key hurdles product owners face: 1) licensing / compliance with global solvency standards 2) capital to underwrite policies. 👍So how does it work?Ensuro is a decentralized reinsurance protocol, pooling capital from liquidity providers in the form of stablecoins (primarily USDC). This capital is then used to underwrite real-world insurance policies, such as travel, climate, and crop insurance.Liquidity providers contribute stablecoins to junior or senior risk pools.Junior pools take on higher risk but yield higher returns, while senior pools offer a more conservative investment option with moderate returns.Ensuro ensures solvency through programmatic guarantees embedded in its smart contracts.With dual licenses from the Bermuda Monetary Authority, Ensuro adheres to rigorous solvency requirements.⚖️ How Ensuro Manages Risk and RewardsTo manage the financial complexity of underwriting policies, Ensuro employs a three-layered capital model:Pure Premium Reserves: These cover expected losses and provide the first line of defense against claims.Junior Solvency Capital Requirements (SCR): This tranche absorbs additional risk, offering higher returns for investors.Senior SCR: The most secure layer, reserved for large-scale portfolio stability, with moderate returns.In scenarios where claims exceed expectations, Ensuro employs a cascading system:Pure premiums are used first.If depleted, junior capital is tapped.Finally, senior capital is utilized.Importantly, any surplus capital generated from lower-than-expected losses is reinvested, ensuring sustainable returns for investors.✅ Enhancing Returns with Asset ManagementEnsuro doesn’t stop at reinsurance. It actively manages liquidity to generate additional returns through investments in decentralized finance (DeFi) protocols such as Compound and Treasury-backed tokens. These strategies yield approximately 4–5% annually, supplementing the returns generated from underwriting.So what’s next?Stay tuned for more updates on our collaborations as we continue to build innovative decentralized insurance solutions that make a real-world difference.D1Conf: Get excited about Ensuro was originally published in Etherisc Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
