InsurTech Rising delegates learned that blockchain technology within InsurTech is poised to take off in insurance in the coming year after being little more than a talking point for the past couple of years.
The title of the event’s second day’s first panel was Blockchain beyond the hype – seizing the potential of distributed ledgers, chaired by Z/Yen chairman Michael Mainelli, who said the potential for the use of blockchain in insurance is greater than in banking.
The automated way is the direction we need to go, he said. “In this Internet of things world, we need ledgers to document and transmit and message between ourselves, and for this and reason despite all the talk in banking I believe these new distributed ledgers are much, much bigger in insurance,” he said.
Insurance industry consortia are now being formed, such as the InsurTech Academy with global insurers and PWC indicating tremendous change in the insurance sector, he said, before asking the panel how they see the field develop.
Everledger BD and operations Calogero Scibetta explained: “We use blockchain to create a thumbprint of diamonds, with a registry based on aggregation of data and we work with banks and insurers to ae sure we can mitigate risk assessment, enabling us to help fraud reduction and movement of counterfeit goods. We see blockchain having a growing impact on insurance.”
AXA head of R&D and foresight Cecile Wendling said her company uses blockchain in fundamental ways. “It is very important we work with the regulators to prove there is no risk from this new technology. Currently AXA has a number of blockchain projects including one on car insurance and limiting fraud. We have decided to invest in blockchain, and this is a promising project for the future,” she said
Allianz head of blockchain Fei Zhang said he takes a very similar approach, for example using the blockchain capability of small contracts to automate business processes and improve the efficiency of the insurer’s own internal processes, such as claims management, or putting contracts into blockchain enabled systems; and facilitating industry collaborations, such as the B3i Blockchain Insurance Industry Consortium, of which Allianz is the founding insurer along with Zurich, AEGON, Swiss Re and Munich Re.
Stratumn co-founder and CEO Richard Caetano told delegates his company is looking at blockchain applied to an enterprise where there is a perceived bias that it will dissolve into decentralisation. “Companies do service very well, but decentralisation does not. I’d like to a discussion on ways in which we can see elements of decentralisation brought back into the enterprise,” he said.
Route 66 Ventures principal Dan Dall’Asta then introduced four demos. First up was the Sparkl Smart Electronic Document and a user case study in reinsurance with two parties, the cedent and the reinsurer, collaborating on a program of reinsurance using a smart policy rather than a centralised system.
Next up was ChainThat, which was launched 18 months ago looking how blockchains might be used in at commercial insurance environment, building a placing platform starting from the beginning of the process so as to be able to demonstrate the value they could bring with blockchain smart contracts. The system is remotely backed up by design, secured by encryption, and there are no single points of failure.
The next to demo was Concordata, which enables the secure sharing of smart contracts within companies, addressing the problems around reconciliation and the issues with multiple companies of cross-checking and the duplication of processes.
Finally, Tradle was presented, integrating blockchain technology with KYC requirements for insurers and other financial institutions that works with several major insurers ad regulators. It claims to address the problems for insurers and consumers posed by KYC. The system allows the customer to collect their own KYC data and enables them to share it among all the other financial institutions with which they do business. Tradle undertakes KYC on blockchain for banks and insurance companies under the watchful eye of the regulators said demo presenter Simon Wilkinson.