Extraordinary unveils platform for trading interests

Insuretech company Extraordinary Re will be demonstrating its platform for trading interests in insurance contracts on 29 April. Its secondary trading platform will enable asset managers and asset owners to build customised portfolios of insurance contract positions just as they would with stocks and bonds.

Extraordinary says the demonstration of the trading platform is a significant next step in the evolution of insurance finance.

“The new asset class of insurance contracts will be valuable to investors of all strategies,” said Lee Van Slyke, CEO of Extraordinary Re. “All portfolio management strategies may benefit, from value investing to technical analysis to buy-and-hold. Among the values to the investor is the non-correlation of insurance contracts with stocks and bonds.”

The company’s patented technology is embedded in a proprietary user interface and a matching engine licensed from NASDAQ. The system is integrated into a purpose-built Bermuda reinsurance company, Extraordinary Reinsurance Company Ltd (ERCL), to allocate ERCL’s underwriting profit and loss to the portfolios created by the trading participants. In addition, each portfolio is allocated a part of the investment income of ERCL.

“Rather than trapping capital in fully collateralised instruments, this patented plan allows long-term investors to earn investment income on premium dollars that have not been paid out in claims and expenses,” said Van Slyke.