- Harneys and droppRWA plan to launch tokenized catastrophe bonds in early 2027, using blockchain-based tokens representing legal ownership of insurance-linked securities.
- The catastrophe bond market reached $65.6 bn in outstanding securities in June 2026, with record quarterly issuance of $11.3 bn, according to Artemis.
- Tokenization could allow smaller investments in catastrophe risk and support insurance capacity in underserved markets, although regulatory requirements and underlying disaster risks remain unchanged.
Bermuda-based Harneys and tokenization platform droppRWA are preparing to issue tokenized catastrophe bonds in early 2027, aiming to expand investor access to insurance-linked securities and potentially increase capital available for natural catastrophe coverage.
The initiative comes as insurers seek additional risk-transfer capacity following another year of substantial natural disaster losses, Coindesk stated.
Global economic losses from natural catastrophes reached $220 bn in 2025, according to Swiss Re, with insurance covering approximately $107 bn. The remaining losses were absorbed by households, businesses and governments.
Catastrophe bonds, commonly known as cat bonds, allow insurers and reinsurers to transfer defined natural disaster risks to capital market investors. Investors receive returns for assuming those exposures but may lose some or all of their principal if a qualifying catastrophe occurs.
Outstanding catastrophe bonds reached $65.6 bn in June 2026, while issuance totaled a record $11.3 bn during the second quarter, according to Artemis.
Despite this growth, significant insurance protection gaps persist, particularly in regions exposed to floods, typhoons and wildfires.
The Organisation for Economic Co-operation and Development (OECD) estimated that 91% of natural disaster losses in Asia-Pacific were uninsured in 2023. Limited historical claims information and catastrophe modeling capabilities can also complicate risk assessment and pricing in vulnerable markets.
How tokenized catastrophe bonds could expand insurance capacity
Harneys and droppRWA intend to structure catastrophe bonds using digital tokens that represent legal ownership interests in the underlying securities.
Traditional catastrophe bonds have largely been accessible to institutional investors and specialist investment funds, with minimum commitments frequently reaching $250,000 or more.
The proposed tokenized structure could accommodate smaller beneficial ownership interests, potentially allowing a wider group of eligible investors to participate.
Any offering would still need to comply with applicable securities laws, insurance regulations and investor-protection requirements.
The capital committed to a catastrophe bond supports a specific insured risk rather than a speculative position against another investor.
Harneys identified flood insurance and typhoon protection in Southeast Asia as potential applications, particularly where conventional reinsurance capacity is difficult to secure because of limited claims data or uncertain loss estimates.
A specialist underwriter could potentially use tokenized securities to raise capital against a clearly defined exposure, specifying the underlying risk assumptions and expected investor returns.
World Bank catastrophe bonds demonstrate public-sector demand
Catastrophe bonds already play a role in sovereign disaster risk financing. In May 2026, the World Bank arranged $200 mn in hurricane protection for Jamaica, replacing an earlier catastrophe bond that paid out following Hurricane Melissa in 2025.
Jamaican Finance Minister Fayval Williams described catastrophe bonds as “an important piece ensuring capital market access” within the country’s disaster resilience strategy.
Harneys and droppRWA see tokenization as a potential means of extending participation in similar risk-transfer structures.
Blockchain-based ownership would not reduce the underlying financial consequences of hurricanes, floods or wildfires, nor guarantee lower insurance premiums in catastrophe-exposed regions.
The proposed model instead seeks to reduce barriers to investing in insurance-linked securities by allowing smaller ownership units while preserving the legal and financial obligations associated with conventional catastrophe bonds.
