Digital risk exchange firm RYSKEX, in association with several European funds, has created a new working group for the captive market. RYSKEX, which focuses on cyber, climate change, pandemic, and political perils, says the group will cover climate change perils, and provide alternative capital for the captive market, particularly Vermont-based captives. Using Parametric Risk Transfer, captives will be able to sell components of their risk portfolio to capital markets. This approach was included in Vermont’s Captive Bill in 2022. Parametric Risk Transfer includes automated claims processing, which insures the transfer in case of a claim within 48 hours, and generates an arbitrage. This lowers administrative costs, as the captive can be communicated with directly, RYSKEX says. The approach also provides a wider selection of risks that fit the investment portfolio, and the possibility to work with leverage, increasing yield in comparison to traditional ILS investments, RYSKEX adds. The final strategy paper will be presented at the Baden-Baden Reinsurance Congress in October 2022. Marcus Schmalbach, CEO of RYSKEX, says: “We are pleased to be working with a team of investment and reinsurance experts to shape the future of Parametric Risk Transfer. It is great to have Europeans as partners in addition to US funds in order to reach our goal of an investment portfolio of US$5 billion — purely for peril climate change — by the end of 2023."
