PolitInsure allows investors in projects and companies around the world to find individuals and organizations willing to insure the political risk associated with their investments.
This is our new methodology for Political Risk Insurance (PRI)
The following give a step-by-step process of what will happen in PolitInsure:
- A new (or established) company has found a willing investor in shares of its company or in one of its development projects (both of these are known on the system as “Projects”), but the investor is hesitant to make the investment due to the location of the investment.
NOTE: While PolitInsure Projects should already have willing investors, the system gives the option for Project Owners to post Projects that are still seeking investors. Potential Investors can message the project owners and decide how to proceed. PolitInsure does not care about any of the details of the actual investment in a Project. That is between the Investor and the Project owner.
- If a Project’s Investor is seeking Political Risk Insurance, they post a Request For Insurance (RFI). This request contains the following information:
- Information on the actual Company or Project that is the recipient of the investment, so the Insurance Investor can make their determination of the risk.
- The Amount requested to insure. This may be the total amount invested in the Project or a partial amount. That is up to the Project Investor
- Criteria the Project Investor is looking to insure. A simple example of this would be the sudden inconvertibility of the currency of the country where the investment is made.
- Potential Insurance Investors log into the site and see a list of Project Investors looking for PRI. If the Insurance Investor sees an interesting project they make. If they see an interesting RFI, they make an offer of: Amount and Required Annual Rate of Return. The Insurance Investor could contact the Project investor to ask for additional or change in the terms.
- Once an RFI closes the best offers are grouped together and become the set of PRI contracts between the Project Investor and the Insurance Investors.
- These Contracts are created as Smart Contracts in the Ethereum Blockchain, and the funds from the Insurance Investors must be allocated to the Escrow wallet when both parties (the Project Investor and the Insurance Investor) electronically sign the contract. While PolitInsure is NOT a cryptocurrency firm, the nature of Smart Contracts means that risk coverage funds in escrow from Insurance Investors to Project Investors and PRI premiums from Project Investors to Insurance Investors, may need to be converted to a cryptocurrency (e.g. ETH) before transfer.
- Reinsurers will be able to go on the system and make offers to “buy-out” multiple PRI contracts.