HCI Group has become the first outside insurer to tap into a blockchain platform built to fund catastrophe reinsurance, launching three tokenized securities tied to HCI's hurricane risk.
The Tampa-based holding company announced Wednesday that three token series are now available on SurancePlus’ platform. The tokens offer contractual returns that mirror the performance of specific participations by HCI's Cayman Islands reinsurance subsidiary, Fortex Reinsurance SPC, in HCI's catastrophe excess-of-loss reinsurance programs, according to a news release.
HCI is the first outside insurer to use the platform, but Oxbridge has run tokenized reinsurance since 2022, when it launched SurancePlus to fund its own collateralized reinsurance sidecar, Oxbridge Re NS. On the same day HCI announced its pilot, Oxbridge confirmed that its 2025-2026 EtaCat Re and ZetaCat Re tokens delivered annualized returns of 29.3% and 43.4%, beating original targets of 20% and 42%.
Those numbers dwarf returns in the broader catastrophe bond market. The Swiss Re Global Cat Bond Performance Index returned 11.40% for 2025, while Aon's Catastrophe Bond Total Return Index showed 14.1% over the 12 months ending June 30, 2025.
HCI's pilot consists of three series, each priced and structured differently:
|
Token Offering |
Offering Price per Token |
Estimated Redemption Value per Token* |
|
Series A |
$11.10 |
$36.00 |
|
Series B |
$22.12 |
$49.00 |
|
Series C |
$30.01 |
$35.20 |
*Estimates assume no catastrophe losses, redemption at the end of the annual risk period, and exclude collateral investment income (Source: HCI).
The tokenized slice is small relative to HCI's broader reinsurance program. The offering targets roughly $12 million in subscriptions if fully subscribed, against the approximately $381.2 million in net reinsurance premiums HCI expects to cede to third parties across its three coverage towers for the 2026-2027 treaty year, with Fortex Re now participating in two of those towers.
Chairman and CEO Paresh Patel framed the launch as an early-stage experiment. "We are pioneering a new method of risk transfer by connecting the reinsurance market with new sources of capital," he said. “While still in its early stages, we believe tokenized reinsurance securities have the potential to expand access to the reinsurance market by lowering investment barriers, shortening investment duration, and creating the potential for increased liquidity for qualified investors.”
The securities are structured to align with the annual reinsurance treaty cycle, giving them a shorter horizon than most traditional insurance-linked securities. Access is split along regulatory lines: a $5,000 minimum, with US accredited investors buying under Regulation D and qualified non-US investors under Regulation S, the latter generally gaining resale eligibility sooner than Regulation D buyers, who often face holding periods of up to a year.
HCI drew a clear line between the tokens and its core business. The securities are issued by SurancePlus and synthetically structured to mirror Fortex Re's performance but have no impact on Fortex Re's or HCI's actual reinsurance programs.
The timing follows a notable shift in the reinsurance cycle. NOAA's official May outlook called for a below-normal 2026 Atlantic hurricane season, and forecaster Tropical Storm Risk cut its projections from 14 named storms in December to 11 by late May. Mid-year catastrophe reinsurance rates are now falling 15% to 20%, and several Florida-linked catastrophe bonds have priced below prior-year levels.
The deal also lands as regulators start treating tokenized reinsurance as more than a niche experiment. The Bermuda Monetary Authority published a discussion paper in November, examining how tokenized catastrophe bonds and collateralized reinsurance structures should fit within existing rules, and said the convergence of tokenization with Bermuda's insurance-linked securities sector could improve liquidity and lower transaction costs.
The BMA followed up on April 9 with a consultation paper setting out its proposed framework. The authority said it will regulate tokenized assets on a "substance over form" basis, judging activities by their economic function rather than the technology used to issue them, and laid out specific requirements covering legal classification, custody and cyber resilience. Stakeholders have until June 30 to respond.
Notably, the BMA's own summary of industry feedback found limited demand so far for tokenizing insurance-linked securities specifically, even as deals like HCI's move forward.
