The group of fifteen global insurers and reinsurers participating in the B3i initiative has been working on a joint distributed ledger for reinsurance transactions driven by blockchain technology.
In a much anticipated move, the group showcased for the first time a fully functional beta-version of its integrated blockchain solution for the re/insurance industry at the 61st Monte Carlo RVS conference. Details of its vision, an industry business case and planned next steps were also shared.
Paul Meeusen of B3i said: "I am really excited about our launch. Over the past four months, a dedicated, combined team drawn from B3i member firms has produced a working prototype covering the core functionalities required to enable a distributed smart contract management system for Property Cat XoL contracts. The deployment architecture is already close to a production-ready environment, and the team is preparing for feature enhancements of the prototype and a first deployment into production in 2018."
After launching the initiative last year, the B3i members have been seeking to fulfill the huge potential of blockchain with a singular vision: to build an efficient world-wide industry platform for market participants to more easily cede, handle and trade risks.
The platform uses state-of-the-art distributed ledger technology to enable secure, confidential and efficient transactions in a blockchain network. The short-term focus of the platform is on handling reinsurance contracts.
The B3i team has also developed an industry business case for the platform across the whole value chain. The consensus amongst the companies is that a productivity gain of up to 30% is achievable. B3i's Sylvain de Crom added that all parties involved will gain from this efficiency. This means that brokers, insurers and reinsurers alike will benefit from lower administration costs, and will be able to offer more attractive rates and fees in the future.
The immediate next step is to launch a market beta-testing program for the prototype starting in October 2017. All insurance industry participants (insurers, brokers, reinsurers) are welcome to join this testing program.
Existing B3i members and new participants will be able to take part in the test on an equal basis under a common testing agreement. The participants will be granted access to a 'sandbox' environment to simulate the creation and settlement of contracts, and will be expected to feedback comments and change requests through defined channels. All participants will also gain access to B3i user group workshops until the end of 2017.
The current governance and membership of B3i, based on a contractual agreement between the 15 companies, will remain unchanged until 31st December 2017. A review is underway to consider creating a more permanent operation within a legal entity in 2018. The objective of this entity is to further develop the infrastructure and processes to enable decision agility, talent acquisition and future platform R&D capabilities. Both current B3i members and new testing participants will be actively involved and kept informed of the investment opportunities presented by this next phase.
More details about the future business strategy and a sustainable business plan for B3i will be disclosed to all market testing participants and B3i members at a later stage.
The current 15 members of B3i are Achmea, Aegon, Ageas, Allianz, Generali, Hannover Re, Liberty Mutual, Munich Re, RGA, SCOR, Sompo Japan Nipponkoa Insurance, Swiss Re, Tokio Marine Holdings, XL Catlin and Zurich Insurance Group.