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The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

BTP Partners with The Demex Group on Climate Risk

Enterprise blockchain company Blockchain Technology Partners (BTP) has partnered with climate risk insurtech The Demex Group to deliver climate-resilience through financial risk solutions on a global scale.

Extreme weather events, natural disasters and the failure to mitigate and adapt to climate change were all included in the top five global risks by the World Economic Forum in its 2020 Global Risks report. Increasingly businesses whose revenues are impacted by weather-related effects will need to access risk products to hedge against potential downside.

Have you listened to our webinar on ‘How Financial Institutions can adjust to working in the New Normal’? Download it here to learn what you can be doing to make the best of 2020’s extraordinary circumstances.

The Demex Group, based in Washington DC and backed by leading reinsurer Munich Re, is pre-empting the volatility of climate change by enabling businesses to develop climate resiliency through the delivery of risk management tools.

This is achieved via The Solutions Center, a platform that onboards the various parties participating in a transaction to deliver affordable risk management. These parties include the risk providers (companies with large balance sheets who can absorb downside), modelling partners (firms with analytics platforms who provide weather sensitivity data), and distribution partners (third parties who have access to specialized markets or large-scale brokerage networks).

Demex is leveraging blockchain and smart contracts to enable these parties to be onboarded and transact together to deliver risk management tools and products. The benefit of blockchain is that it enables Demex to create an efficient trust architecture to deliver the value created by multiple parties while protecting each party’s interests, instead of relying on costly paperwork.

The benefit of smart contracts (digital expressions of contracts between parties stored cryptographically on a blockchain) is that Demex is able to securely store the rules and conventions and increasingly automate the outcomes of specific, data-driven weather events.

To realize this, Demex selected Sextant for DAML, a management platform from BTP that automates the deployment and management of the underlying blockchain and DAML smart contract infrastructure.

Ed Byrns, President & CEO of The Demex Group, says: “We selected Sextant for DAML to allow us to fully realize its benefits by providing us with a stable platform to build upon, accelerating our development and reducing our time to market.”

“This is an excellent case study of the business value of blockchain and smart contracts – by enabling competing risk providers to collaborate and deliver customized solutions to a broader market,” adds Duncan Johnston-Watt, CEO & Co-founder of BTP. “The Demex Group is lowering the barrier to entry for businesses to develop climate resiliency.”

Want to learn more about rapidly evolving ESG regulations? Download our free Regulatory Data Handbook 2020/21 to obtain a detailed overview of new requirements such as the upcoming Sustainability Disclosure Regulation.

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