Schroders Capital teams up with Hannover Re on tokenised ILS pilot

Schroders Capital has launched a tokenisation pilot to enhance the way insurance-linked securities (ILS) are invested and managed.

The collaboration with Hannover Re has enabled reinsurance contracts to be tokenised and traded on a public blockchain platform using smart contracts.

The private markets asset manager said that tokenising these contracts has streamlined the investment process by automating subscriptions and reducing settlement times.

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Additionally, key catastrophe insurance data sources can be integrated into the smart contracts, meaning that payments to investors are automatically triggered if specific natural disasters occur.

It also shows the potential to improve the client experience, the firm said, as investors can hold tokens in their own digital wallets alongside other digital investments.

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“The success of this pilot showcases the immense potential for enhancing transparency, streamlining investment processes and improving client experience in the reinsurance sector,” said Stephan Ruoff, co-head of private debt and credit alternatives at Schroders Capital.

“It paves the way for a more interconnected and efficient digital ecosystem, and we are looking forward to exploring the broader application to wider investment scenarios and clients.”

Earlier this year, Schroders Capital announced that its ILS team is now managing over $5bn (£3.9bn) in funds amid growing client demand. The ILS unit forms part of Schroders Capital’s private debt and credit alternatives business which was launched last year and manages over $30bn in assets.

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