Catastrophe risk, standardised
A price for catastrophe risk.
Veritas is building a standardised, centrally cleared industry-loss contract - and an independent, governed price for it. The same cover the market already trades, with the three things it has never had: a standard, a price, and a clearing house.
The problem
The cleanest catastrophe instrument has no price.
An industry loss warranty pays when a published industry-wide loss index crosses a threshold. No loss adjustment, no claims dispute. It is the purest way to transfer catastrophe risk.
Yet every one is written bilaterally, deal by deal. Once it is bound, there is nothing to look at until the event and the loss number. Between inception and loss, the risk has no price.
No mark
A position can be valued for reporting, but there is no price anyone can deal against.
No exit
With nothing to quote against, a position is held to expiry.
No financing
An illiquid, bespoke contract cannot be pledged the way a standard, marked instrument can.
No anonymity
Every bilateral trade tells its counterparties who is buying, and where.
The thesis
Every risk market that became tradeable did it in the same order.
Oil, freight, natural gas, power: each started as a bilateral trade among insiders. Each became a market once three things existed - a standard definition of what is traded, a price published by someone with no position in it, and a clearing house between buyer and seller.
The physical players did not lose their business. They gained an instrument to manage risk against, and the market around them grew.
A standard
One definition of the contract, identical for everyone, so two strangers know exactly what they are trading.
A price
An independent reference, built under published rules, so both sides can agree on a level.
A clearing house
A central counterparty, so neither side has to underwrite the other.
Catastrophe risk is one of the last large risk classes still missing all three.
What we build
Three layers. We build the first two, and clear through regulated infrastructure.
The contract
A standard industry-loss contract, written to be traded rather than negotiated.
- Phase one is an ILW: same trigger, same loss index the market already uses.
- It settles on the published industry loss - never on a price.
- Wording inherited from market practice, not reinvented.
The price
An independent assessment of what the contract is worth between inception and loss.
- Built from several independent contributors - never from a single source.
- Published methodology, independent oversight, full audit trail.
- Governed to the standards expected of a financial benchmark.
Cleared settlement
The contract is designed to be listed and centrally cleared on a regulated exchange.
- The clearing house stands between buyer and seller.
- Margin instead of bespoke bilateral terms.
- Settlement on a fixed, published timetable.
Principles
Transparent on price. Anonymous on identity.
The price is not the loss
The contract pays on the published industry loss index. The price is a valuation layer: it tells you what the position is worth before the event, never what it pays after.
Neutral by design
Veritas does not trade, does not broker and takes no positions in the contracts it prices. No contributor or partner has an exclusive role.
Brokers keep their clients
We are not competing for placement. Brokers keep the relationship and the placement; we provide the standard and the price.
A price does not create a market
Liquidity comes from standard contracts and willing counterparties. A governed price is what lets them agree on a level, mark a position and, over time, finance it.
Who it is for
For the people who carry catastrophe risk.
ILS funds and vehicles
Protection on a concentrated book without showing that book to the market - and a position that can be marked.
Reinsurers
Standard index cover alongside indemnity retrocession, with no bilateral credit to manage.
Capital providers
Access to catastrophe risk through a standard, cleared contract with a published price.
Contact
We are building this with the market, not around it.
If you price, carry or place catastrophe risk and want to tell us where we are wrong, we would like to hear from you.