As more corners of traditional finance experiment with tokenization, the reinsurance market may not be far behind.
Oxbridge Re Holdings (NASDAQ: OXBR) founder, chairman and CEO Jay Madhu said the majority of reinsurance business moving onchain is closer than many might expect.
"It's not very far," Madhu said in a conversation with TheStreet Roundtable host Jackson Hinkle .
"Most things are moving onchain. It's much more efficient and it levels the playing field."
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Tokenization could ease capital constraints
Madhu argues that access to capital is the central force shaping reinsurance pricing, and, therefore, the cost of home insurance for everyday consumers.
"Constraint to capital is what drives prices," he said, pointing to Florida as a prime example. Insurers in the state currently pay about 45 cents on the dollar for reinsurance coverage, a cost that ultimately flows through to homeowners in the form of higher premiums.
If access to reinsurance capital were broadened through tokenization , Madhu believes pricing could fall.
"If access to capital was a little easier, it'll bring down that 45 cents to some number lower than 45, right?,"he said.
Two things will happen, he said. The investors who are investing in reinsurance will make a good return, and the general public will also benefit, he added.
By opening the asset class to a global pool of investors, Madhu contends that blockchain rails could "even the playing field," reducing friction and expanding participation beyond traditional institutional players.
Still, he emphasized that compliance and transparency remain non-negotiable.
"AML and KYC are paramount," he said.
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Opening reinsurance to retail users
Oxbridge Re is already putting the concept into practice through its tokenized offerings.
The company has launched its latest reinsurance season contracts via a Web3 real-world asset subsidiary called AssurancePlus, allowing investors to participate directly in excess-of-loss reinsurance. The reinsurance season runs from June 1 through May 31 of the following year, and capital is currently being raised for the next cycle.
Investors who complete AML and KYC verification can purchase one of two security tokens tied to reinsurance performance, Madhu said.
One token targets a 20% annualized return, while another offering targets 42%. The higher-yielding token carries more risk but has historically delivered outsized returns, Madhu added.
Last year's 42% target token paid out 49%, he said, while this year's 42% target is expected to come in "a little bit north of 42%." The 20% token, issued for the first time last year, is expected to return roughly 25%, he added.
"These are the type of returns that reinsurance pays out,"Madhu said.
Assurance 3.0 on Solana
The next iteration, dubbed "Assurance 3.0," will see Oxbridge Re issue its security tokens on Solana (SOL), Madhu saod.
The firm is working with AlphaLedger and is already a partner with Securitize, positioning the offering within established digital securities infrastructure, he added.
For Madhu, the combination of blockchain efficiency, regulatory compliance and global investor access could fundamentally reshape how reinsurance capital is sourced.
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This story was originally published by TheStreet on Feb 13, 2026, where it first appeared in the Innovation section. Add TheStreet as a Preferred Source by clicking here.
