<p><span class="NormalTextRun SCXW59281768 BCX0">Serial entrepreneur </span><span class="NormalTextRun SCXW59281768 BCX0">Karn Saroya</span><span class="NormalTextRun SCXW59281768 BCX0"> </span><span class="NormalTextRun SCXW59281768 BCX0">has</span><span class="NormalTextRun SCXW59281768 BCX0"> raised $</span><span class="NormalTextRun SCXW59281768 BCX0">14</span><span class="NormalTextRun SCXW59281768 BCX0"> million</span><span class="NormalTextRun SCXW59281768 BCX0"> in a seed round</span><span class="NormalTextRun SCXW59281768 BCX0"> for </span><span class="NormalTextRun SCXW59281768 BCX0">his</span><span class="NormalTextRun SCXW59281768 BCX0"> new</span><span class="NormalTextRun SCXW59281768 BCX0"> decentralized</span> <span class="NormalTextRun SCXW59281768 BCX0">reinsurance</span><span class="NormalTextRun SCXW59281768 BCX0"> protocol</span> <span class="NormalTextRun SCXW59281768 BCX0">called Re. </span></p> <p><span class="NormalTextRun SCXW59281768 BCX0">Saroya previously co-founded insurtech provider Cover and fashion app Stylekick, which was acquired by Shopify.</span></p> <p><span data-contrast="auto">Cover launched in 2016 with the goal of using data to underwrite customers in a better way. The startup raised a total of $27 million from backers like Exor, Tribe Capital and Sand Hill Angels, according to </span><a href="https://www.crunchbase.com/organization/cover-5/company_financials"><span data-contrast="none">data from Crunchbase</span></a><span data-contrast="auto">. In June of this year, the company terminated “all but a handful” of employees as funding and acquisition efforts were unsuccessful, </span><a href="https://coverager.com/cover-lays-off-most-employees/"><span data-contrast="none">Coverage reported.</span></a><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">“We were underwriting profitably, we distributed through 5000 independent agencies, but ultimately decided to wind the business down and transition all our policyholders to another insurer,” said Saroya in an interview with The Block. “So born out of us building Cover really came Re and Re is a licensed reinsurer.”</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p>Cover is in the process of transitioning policyholders to other insurance companies and Saroya is assisting with this process.</p> <p><span data-contrast="auto">Investors in Re’s seed round include Tribe Capital, Framework Ventures, Morgan Creek Digital and SiriusPoint, said Re in a release. </span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span><span data-contrast="auto">The startup is valued at a $100 million post-money valuation, said Saroya in an interview with The Block.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">“The opportunity set for a decentralized approach to reinsurance is immense - there’s nearly a trillion of existing insurance surplus to be tokenized, and a huge amount of capital on the sidelines that will start to earn reinsurance premiums in the near future,” said Arjun Sethi, co-founder and partner at Tribe Capital, in a statement. </span><span data-contrast="auto">Tribe Capital incubated Re under its crypto labs umbrella.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <h2>A 'decentralized Lloyds of London'</h2> <p><span data-contrast="auto">Reinsurance transfers the risk from one insurance company to another to reduce the likelihood of a large payout. The reinsurer will receive a cut of the insurance premiums but will also bear a portion of the losses when a claim is made.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">Saroya describes Re as a “decentralized Lloyds of London,” referring to the specialized insurance and reinsurance market in London.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">“We own a commercial reinsurer and if you think about what Lloyds does it takes a risk from other insurance companies that are looking to offboard certain concentrated risk,” Saroya said. “And it works with large companies, it also works with governments [and] works even with individuals to be able to back specific esoteric risks.”</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">Built on the Avalanche blockchain, Re will enable reinsurance brokers to bring business to clients via the protocol, Saroya said. Distributed syndicates on the protocol will be able to underwrite the claims, he added.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">Syndicates can earn yield in return for supplying capital. Members will also be able to earn yield by supplying capital to an index of insurance programs across a range of industries. This will be separated into different tranches, and the member pool will be the senior tranche, according to the whitepaper.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">To join as a member, an individual will need to be an accredited investor and be willing to undertake know-your-customer and anti-money laundering checks, Saroya said. He hopes to eventually have the platform enable retail investors to also gain access to insurance premiums.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">“From my perspective, this is one of the very few use cases where we're directly correlating yield generated via crypto asset holders to real-world economic activities and real-world risks and so that's particularly exciting,” Saroya said.</span></p> <p><span data-contrast="auto">The </span><a href="https://files.staging.coverre.com/docs/Re-Whitepaper.pdf"><span data-contrast="none">protocol’s whitepaper</span></a><span data-contrast="auto"> outlines that Re will be ceded with millions in premiums generated by auto insurance policies written by Cover. Another $50 million to $100 million will then be ceded by partner insurance companies and reinsurers over the next 12 months.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p> <p><span data-contrast="auto">Re recently partnered with Joe Gaito and Jason Hoffman of </span><a href="https://www.freedomreuw.com/copy-of-about-fru"><span data-contrast="none">Freedom Re Underwriters</span></a><span data-contrast="auto"> as the protocol’s first independent syndicate and is now inviting underwriters and actuaries to apply for syndicate roles.</span><span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span></p><br /><span class="copyright"><p>© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.</p> </span>