ICYMI: Lombard Odier was the investor Behind a Blockchain Catastrophe Bond Trade

This sounds more like a proof-of-concept that secondary trades can be effected rather than something that is going to sweep the market off its feet but more power to 'em if it makes sense.

From Artemis, January 8, 2018 :

Asset manager Lombard Odier was one of the investors that participated in the first blockchain based secondary trade of catastrophe bond notes, as the firm’s ILS investment team purchased a chunk of the near $15 million Dom Re IC Limited 2017 private cat bond.

The Insurance-Linked Strategies (ILS) team at Lombard Odier Investment Managers, the asset management arm of the Lombard Odier Group, said that its purchase of catastrophe bond notes using a blockchain platform is believed to be among the first secondary market transactions completed using a blockchain.

The Lombard Odier ILS team purchased the cat bond securities for the LO Insurance Linked Opportunities Fund through a delivery-versus-payment (DVP) settlement from Solidum Partners AG, the Swiss based catastrophe bond and ILS investment fund manager.

Solidum had issued the Dom Re IC private cat bonds in August 2017 using its own private blockchain (ILSBlockchain) that was made available to participants in the transaction issuance on an invitation-only basis. Solidum said that the Dom re private cat bond issuance was the first to be settled using a blockchain.

Simon Vuille, Portfolio Manager, ILS team, Lombard Odier IM, commented, “Using blockchain markedly lowered the transaction costs relative to other DVP settlement methods where costs are prohibitive for transactions of this size....MORE

Regarding "proof-of-concept", the second (bolded) link says the original (primary) package:

...was issued using Solidum Partners Guernsey-domiciled transformer vehicle Solidum Re (Guernsey) ICC Limited, with one cell named Dom Re IC Limited hosting the underlying reinsurance contract and acting as the issuer for the $14.8 million of notes.

It’s the first example of a catastrophe bond securitisation of insurance risk that has been digitised onto a private blockchain to facilitate the process of settlement. In fact this is believed to be the first securities settlement process using the blockchain that isn’t just a proof-of-concept.

The private blockchain, named “ILSBlockchain” by Solidum, has effectively replaced the role of a traditional settlement system, such as a Euroclear or DTC, providing a peer-to-peer way to manage settlement of the note issuance.

The transaction saw Dom Re IC Limited issue $14.8 million of notes, due 2023, representing a securitisation of a reinsurance contract, to 6 investors, which are all ILS funds....

The bolded link goes on to state:

...Solidum said that secondary traders [the Lombard Odier transaction] can become participants on the ILSBlockchain in order to acquire notes and broker-dealers could also sign onto it, in order to facilitate trades between participants.

So it’s not quite the same as “a blockchain cat bond” might be seen, as this is in reality a cat bond that has been reflected in the blockchain to enable settlement to be effected in a more transparent, lower cost and more efficient manner....

Although the size wasn't mentioned if it was in the $2 - 3 million range, it was indeed small but interesting nonetheless.

Here's the Lombard Odier press release on the deal.

Investment & Pensions Europe also picked up the story.