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Danish Red Cross Recently Launched Volcano Catastrophe Bond, insurance funds, worth $3M
- The Danish Red Cross’ “cat bond” oversees around ten active volcanoes, all marked significant humanitarian threats, across three continents.
- The bond uses a modelling technology developed by Mitiga Solutions and the blockchain aspect of the project is supported by Repluxus’ technology.
- The covered volcanoes endanger over 700K people, living within 60 miles (100km) radius of each volcano.
The Danish Red Cross collaborated with several private and humanitarian partners to launch the world’s first catastrophe bond for volcano-related disasters. The list of investors include Solidum Partners, Plenum Investments and Schroder Investment Management. This “cat bond” oversees around ten volcanoes across three continents and aims to raise up to $3 million from investors as aid to help stabilize the repercussions of a volcanic eruption.
How will the Danish Red Cross’ cat fund help?
The Danish Red Cross’ cat bond uses multi-hazard risk management modelling technology, to facilitate fund-distribution, developed by Mitiga Solutions. The program reads the eruption generated ash plume height and wind direction, once the height crosses danger level with wind in the direction of the communities, the system automatically issues payout from the bond. The blockchain aspect of the project is supported by Repluxus’ techs, which will help raise humanitarian funds in advance, so aid is released as early as possible.
Active and Humanitarian Threats
The 10 volcanoes covered by the cat bond includes Mexico’s Popocatépetl, Colombia’s Nevado del Ruiz, Indonesia’s Merapi and Raung, Fuego from Guatemala, Villa Rica from Chile, Mt. Cameroon in Cameroon, Pichincha in Ecuador, Cotopaxi, and Tungurahua. They are all active volcanoes, marked as significant humanitarian threats, that endanger above 700,000 people living within 60 miles (100km) radius of each volcano.
Blockchain, Security, and Responsibilities
The CEO of Replexus Cedric Edmonds informed that the mentioned catastrophe bond is part of an insurance-linked securities blockchain and thus the transactions will be cost-efficient.
The crypto
community has actively been participating and contributing to humanitarian reliefs during the times of natural as well as man-made disasters. Earlier this year, the Texas winter storm victims received immense help from the funds contributed by crypto firms. And also in January, the American Cancer Society with the contributions of the crypto charity organization The Giving Block established the first-ever cryptocurrency cancer fund.
Fulfilling their corporate social responsibility, Danish Red Cross’ volcano catastrophe bond’s inclusion in the crypto and blockchain adoption for humanitarian causes is proving to be a great step ahead.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
