Cells, Cell Managers, and Risk Pools
The Re Protocol’s modular structure relies on Cells, Cell Managers, and Risk Pools to ensure efficient and scalable deployment of capital into reinsurance opportunities. This innovative framework allows for specialization, accountability, and transparency at every stage of the capital deployment process.
What Are Cells?
Cells are the foundational units of the Re Protocol, each representing a distinct portfolio of reinsurance contracts. These portfolios are managed and governed independently through their own smart contracts, ensuring operational segregation and risk isolation.
Key Characteristics of Cells:
Segregation: Each Cell operates independently, with its own financials and risk parameters.
Transparency: Cell-specific data, including capital allocation and performance metrics, is available for participants to review on-chain.
Flexibility: Cells can be customized to cater to different types of reinsurance agreements and risk profiles.
The Role of Cell Managers
Cell Managers are experienced reinsurance professionals or entities responsible for originating and managing Risk Pools within their designated Cells. They play a critical role in ensuring the profitability and sustainability of the protocol.
Key Responsibilities:
Risk Pool Creation: Cell Managers propose and structure Risk Pools based on their expertise and market opportunities.
Capital Deployment: They manage the allocation of capital from the Insurance Capital Layer into approved Risk Pools.
Reporting: Cell Managers are required to provide regular updates and actuarial reports on the performance of their Risk Pools.
Initial Cell Manager Partnership
To ensure stability during its initial phase, the Re Protocol has partnered with CoverRe.com, an established Cayman-based reinsurer with a proven track record. This partnership guarantees adherence to best practices in underwriting and capital management. Additional Cell Managers will be onboarded as the protocol transitions toward decentralized governance.
What Are Risk Pools?
Risk Pools are collections of reinsurance agreements within a Cell, designed to diversify and optimize risk exposure. Each Risk Pool is structured to meet specific market needs and maximize returns for participants.
Key Features of Risk Pools:
Customizable Structures: Risk Pools can be tailored to cover specific insurance lines, such as automobile or commercial property risks.
Collateralization: All Risk Pools are fully collateralized to ensure claims can be paid promptly.
Performance Monitoring: Real-time tracking of Risk Pool performance is available to participants through the protocol’s dashboard.
Workflow Overview
Cell Creation: A Cell Manager establishes a new Cell and defines its scope and objectives.
Risk Pool Proposal: The Cell Manager submits a proposal outlining the terms and capital requirements of a new Risk Pool.
Approval and Funding: The protocol reviews and approves the Risk Pool, allocating capital from the ICL.
Execution: The Cell Manager oversees the execution of reinsurance agreements and monitors performance.
The modular design of Cells, Cell Managers, and Risk Pools ensures that the Re Protocol remains flexible, transparent, and scalable. By leveraging this structure, the protocol can efficiently connect capital providers with high-quality reinsurance opportunities while maintaining rigorous oversight and accountability.
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