Blockchain should be viewed as a “team sport” by the risk-transfer industry as opposed to a specific technology; more a way of connecting companies and people and gaining efficiencies.
That was one of the key points raised by a panel of experts speaking at Intelligent InsurTECH Europe 2019, a conference in London on October 14. The session, called ‘Blockchain Beyond the Hype: Use Case Realities’, featured John Carolin, chief executive, B3i; Rhys James, partner and head of risks, Paragon Brokers; Stuart King, CEO-EMEA, Strategic Risk Solutions; Richard Phipps, director, distributed ledger technology, Swiss Re; and Turlough O’Brien, head of IT, global corporate and speciality, Aviva.
Carolin, who was appointed as the permanent CEO of B3i in June, said that the industry increasingly recognises the potential of blockchain to improve efficiencies and streamline operations.
“We have been on a journey but the feedback from our stakeholders has been very good,” he said. “We are very execution focused but what the industry is increasingly understanding is that blockchain is a team sport – it is about creating a network and taking people on that journey as much as it is about technology. It is very much about collaboration for us; that is where success will come from as well as getting the regulators on board with what we are doing.”
B3i recently revealed that China Pacific Insurance Company (Pacific Insurance) has become the latest large re/insurer to invest in the venture. CPIC is a major insurer in China providing risk protection solutions, wealth planning and asset management services to more than 126 million customers.
B3i has also recently announced the release of v1.0 of its Property Catastrophe Excess of Loss Reinsurance product on the Corda Network. This follows the creation of the first Corda 4.0 node on the global Corda Network announced by B3i in July. The product improves the execution of the risk transfer process by reducing friction across the value chain, end-to-end.
At Intelligent InsurTECH Europe, Carolin said: “I am really happy with where we are at the moment in terms of both rolling our first products out and signing up new investors. The whole reason we exist is because of our shareholders; we are producing regular workshops with our customers and stakeholders, testing and developing what we are doing, and I am very pleased with where we are with things.”
During the panel discussion, the importance of collaboration in the industry was reiterated by all the panellists. O’Brien added: “As long as we have so much inefficiency in the value chain, anything that can reduce that and remove redundant processes, will have a very material benefit,” he said.
“It is a journey the industry must go on. It is not a one size fits all scenario – it is very much an ongoing journey. It may be more relevant to some companies and some lines of business than others. But what is definitely true is that blockchain should be seen as a team sport and that is why the B3i consortium brings so much value.”
Phipps at Swiss Re agreed that the key to blockchain working for the industry will be collaboration and said that he sees the greatest value coming about because of the potential for standardisation.
“The key is around data standards and how we deliver these in a more structured manner. That will allow us to do business more efficiently and potentially help us close some of the protection gap in some cases. It should also make it easier to do business generally, something that will benefit many parts of the value chain.”
King noted that the captives sector is within a perfect storm at the moment with pricing and capacity tightening for the sector, while there is also growing pressure on the industry to find ways of becoming more efficient. As such, he said interest in the possibilities that blockchain could offer is growing all the time.
“I have been involved in blockchain for many years – I agree that it is not just about technology, it is about changing the wider business model,” he said. “Increasingly, people are understanding that the captives sector could benefit. It is a question of educating people but we are getting more and more inquiries around blockchain as people understand what the real benefits could be.”
James added that while many insurers do a good job of embracing technology, there is always room for improvement. He said that blockchain technology has real potential to drive improvements and efficiencies in the insurance industry.
“The size of the industry means the cost savings that can be achieved are quite considerable,” he said. “Blockchain technology is most useful in industries where there are a large number of different stakeholders involved in a process, which is very true of the insurance industry. Risk transfer is a complex business, involving lots of different parties, so blockchain can be very powerful.”
B3i, John Carolin, Europe, China, Global, insurtech, technology, blockchain, Corda