Transforming Reinsurance Costs in Florida: The Rise of Tokenization
Reinsurance costs in Florida, where insurers typically allocate approximately 45 cents of every premium dollar to such coverage, may experience changes with the advent of tokenized reinsurance models. Oxbridge Re CEO Jay Madhu highlighted the potential of tokenization to introduce more capital into the market, potentially affecting reinsurance pricing structures. As reported by The Royal Gazette, Madhu emphasized that capital availability fundamentally influences reinsurance pricing and homeowners' insurance costs.
According to Madhu, tokenization can lead to broader capital access, potentially decreasing reinsurance pricing and benefiting investors and policyholders alike. He stated, "Constraint to capital is what drives prices." Headquartered and licensed in the Cayman Islands, Oxbridge Reinsurance Limited focuses on the US Gulf Coast property and casualty sector, facilitating reinsurance acquisition for insurers through Oxbridge Reinsurance Limited and Oxbridge Re NS.
Oxbridge has initiated subscriptions for a 2026-27 tokenized reinsurance program, aiming for annual returns between 20% and 42% through digital tokens T20-2027 and T42-2027. These tokens will be hosted on Alphaledger via the Solana blockchain, transitioning from the previous Midnight blockchain used in June 2025. In 2023, the DeltaCat Re issuance achieved a 49% return, while the 2024 EpsilonCat Re fundraising targeted a 42% return despite setbacks from Hurricane Milton.
By 2025-26, through EtaCat Re and ZetaCat Re, Oxbridge secured over $3.6 million, with performance metrics showing a balanced-yield token achieving approximately 25%, surpassing its 20% target. Oxbridge accumulated roughly $9 million in capital over three years, with preferred hurdle rates of 8% for the T20 strategy and 16% for the T42 strategy. Contracts offer up to a 5% discount for early participants, with subscriptions open until March 31 for the 2026-27 contracts.
Advanced Reinsurance Solutions
Oxbridge branded SurancePlus's reinsurance tokenization as the first "onchain" reinsurance asset sponsored by a publicly listed entity. Digitizing reinsurance interests as onchain real-world assets (RWAs) democratizes access to reinsurance markets for US and international investors without utilizing leverage. Oxbridge's target return of 42% notably exceeds recent performance figures reported by industry leaders like AM Best and Gallagher Re.
Future Prospects and Industry Impact
In February 2026, Oxbridge Re Holdings formalized a $1,000,000 promissory agreement with Real World Digital Assets LLC at a 16% annual interest rate. Madhu suggests that the insurance sector may see expedited adoption of tokenized reinsurance, driven by ongoing exploration of tokenization in traditional financial frameworks. He emphasized the need for adherence to regulatory compliance requirements and transparency standards for any advancement towards onchain models.