FAQ - Risk Partners

This section provides answers to frequently asked questions from our risk partners.

FAQ - Risk Partners

How does Ensuro differ from a traditional insurance capacity partner?

Ensuro provides access to capital from DeFi investors quickly, offers real-time visibility on an insurance product’s performance, and has lower operating costs which enable us to pass these efficiencies to our risk partners in the form of cheaper capacity. These factors allow Ensuro to conduct smaller scale pilots with risk partners, which is something that most traditional insurers generally do not do.

This involves starting with a small sample of policies and gradually increasing the volume while monitoring the product’s performance and modifying the pricing in real-time. Ensuro has collaborative relationships with its risk partners, working with them to find the optimal pricing.

How much cheaper is Ensuro’s capacity as compared with the traditional market?

Ensuro’s technology introduces many efficiencies to the risk transfer process. This translates to not only more streamlined and faster processes but also to less operational cost. Ensuro is able to provide cheaper capacity by passing on these savings to our risk partners via our pricing. Different capacity providers will often provide different prices for the same risk for a variety of reasons such as:

Is this risk an accommodation to access other risks in the portfolio?

Are they trying to break into a new market? How much do they want the business?

However, with significantly lower operating expenses, we are confident Ensuro’s pricing will consistently be at least 20-25% lower than traditional carriers.

Do you only underwrite parametric products?

No, Ensuro infrastructure can support products that are not necessarily parametric. One of the preferred requirements of the risk is for a short tail, meaning that if/when the trigger event happens there is a clear and precise period of time during which the payout can be settled.

How do you underwrite a risk?

Ensuro’s Quant team does not re-underwrite the risk. The risk partner seeking to utilize the Ensuro platform performs their own initial underwriting analysis. Their underwriting of the model, however, is carefully reviewed by the Ensuro Quant team which performs analysis and simulation to ensure the liquidity providers' investments are protected as much as possible from losses

How can you guarantee your solvency in case of a payout?

When receiving the premium of a policy the smart contract automatically checks there is enough available capital in the Ensuro Liquidity pool. If the capital is not sufficient, the policy is rejected and the premium is sent back to the wallet that made the initial transfer. If there is sufficient capital available to guarantee solvency, the funds are allocated and locked for the duration of the policy.

How long does it take for a new program to be launched?

The process to launch a new program is relatively quick. After having gathered preliminary information and having developed an understanding of the product, the Ensuro Quant team (QT) schedules a call with the risk partner to address any questions about the legal requirements for the program. If the Ensuro team believes that the legal requirements fit within the licenses of Ensuro, a questionnaire with specific questions regarding the risk model and the underlying assumptions to support the model is prepared and shared. After receiving the answers, Ensuro’s Quantitative Team checks if additional material is necessary for the risk model validation, the QT shares with the risk partners the result of the portfolio simulation, and offers preliminary pricing to start the discussion. Once the pricing is agreed upon by both parties, the Ensuro Technical team proceeds with the integration of the risk model to the Ensuro protocol. Simultaneously, a legal agreement is prepared to formalize the partnership. After the risk partner completes the technical integration and the legal agreement is signed, the program is ready to be launched. The entire process, depending on the complexity of the product, can take from between 2 weeks to around 2 months.

Do I need to have blockchain experience in my team to integrate with Ensuro?

No prior technical blockchain experience is required to integrate with Ensuro. The goal of Ensuro is to make the integration as easy as possible and remove the blockchain complexities for our risk partners.

What's the cost of Ensuro's service?

Ensuro charges a flat % fee of the program's revenue or the gross written premium collected for the product covered. The fees depend on the nature of the risk and the size of the portfolio.

Does Ensuro control the price of the product for my end customers?

Ensuro advises the net premium necessary to access the capital of Ensuro’s liquidity providers. The risk partners have control of the final price that will be charged to their customers.

The insurance product I want to cover is new and there's not that much market data. Do I have a chance with Ensuro?

Yes! Ensuro was developed to give the opportunity for new and innovative products to hit the market and grow. We would be more than interested in having a discovery chat and seeing how we can work together to potentially onboard your risk to the Ensuro platform.

Can I help propose or build insurance products?

Yes! We encourage developers and people interested to join our community and build on our framework. Do not hesitate to reach out to us by email at [e-mail] or leave us a message here and we will contact you as soon as possible.