Blockchain-based Black Insurance attracts investment from Fineqia
Investment firm Fineqia International is taking an equity stake in Estonia-based Black Insurance, a digital insurance startup based on the blockchain.
Black intends to become a licensed insurer and enable the underwriting of new insurance policies via insurance syndicates akin to the Lloyd's market. Insurance brokers and agents will be able to create bespoke insurance schemes faster and cheaper using the Black platform, according to the company.
Black will price the risk of specific syndicates and sell fractional ownership in such pools in the form of tokens representing the unit value of each syndicate's expected financial return. This process makes participation in insurance syndicates more efficient and transparent via time-stamped and traceable transaction records recorded on the blockchain, the company claims.
Black is gearing toward an initial coin offering (ICO) later this year, to sell utility tokens that will be used for transacting on its platform, once it is publicly available.
"We are excited to back Black, which allows for a wide variety of investors to participate in a high-quality insurance finance product," said Fineqia's CEO Bundeep Singh Rangar who also helped to found Black.
Research by Accenture indicates that a third of all insurers are planning to use blockchain in the next two years and another third have it on their agendas for consideration.
"There is a lot of appetite in the insurance industry to innovate and cross the threshold to a radically new era," adds Risto Rossar, Black's founder. "We already have dozens of requests from brokers across the world to join the platform. They have grown impatient of the innovation-averse, slow mindset dominating the industry, and see Black as a way to make their aspirations a reality."
Black's utilization of blockchain in insurance means a decrease in operational costs, increased security and transparency, mitigation against any single point of failure and enhancement of the reputations for all parties involved, according to the firm. By establishing a marketplace where investors and insurance underwriters can directly trade with one another, Black seeks to minimize transaction costs.
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