Our product

What is it?

The first product developed by B3i is a Property Cat XOL contract. The underlying technology is Hyperledger and B3i has partnered with IBM in order to implement the platform.

Prototype development

The short term focus of the platform is on handling reinsurance contracts on a state-of-the-art distributed ledger:

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  • From April 2017 to September 2017 a dedicated, combined team drawn from B3i member firms has produced a working prototype. The Prototype covers the core functionality required to enable a distributed smart contract management system for Property Cat XOL contracts
  • The technical architecture is already close to a production-ready solution and the team is preparing for feature enhancements of the prototype and a first deployment into production in 2018

The development team is based in Munich supported by virtual teams from member companies from across the globe. The final product was reviewed in June 2017 and is now entering a testing phase open to non-members. The parallel run is planned for 2018.

What does the application do?

Rather than maintain data on separate ledgers of each contracting party, the B3i blockchain application runs a shared process, calculation, settlement and reporting on a distributed ledger.

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This is able to handle:

  • Multi-party transactions: cedents, brokers and reinsurers underwriting a contract via nodes;
  • Privacy: the Hyperledger architecture channels manages encrypted information between parties;
  • Smart contract logic in computational logic: in a property Cat Excess of Loss contract;
  • Multi-layers: combining programs, layers, sections and proportional and XOL logic;
  • Approvals: our digital signatures have their own root of trust without relying on a central authority;
  • Settlement: all common accounting data to settle the contract post-placement are generated;
  • Asset transfers: state changes lead to value transfers, traceable in an immutable, digital way.

If you consider that Google has helped us to organise data, this product from B3i will help us to organise our risk data.

Architectural Overview

B3i Product Lifecycle

Each organization will have a private ledger for storing their own contract elements and data.

All organisations also participate in two shared ledgers:

  • The shared Master Data ledger contains common and agreed master data including public company information and common contract clauses.
  • The shared Communication ledger is cryptographically secured and stores the communication used to consent on the state of the private organization ledgers. Only counter-parties can see the content and destination of the communication

How does the application work?

The distributed ledger application allows a cedent to request a quote, directly or via a broker, within given specifications (class of business, deductible, limit, estimated subject premium, rate, minimum deposit premium, installment schedule, broker commission etc.).

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Cedent, broker and reinsurer interact on the B3i platform, until signed lines are agreed. Placement messages are channeled and encrypted, so that each party can only access and read what it should. The same process applies for the settlement of contracts post-placement.

Today we continue to struggle with contract uncertainty (signatures failing post inception), see quarterly settlements taking multiple weeks (both for retro and reinsurance contracts) and even strain getting cross-border payments executed on-time overnight.

We all agree that today's technology and financial markets should do much better. Our prototype has proven this and is able to shorten placement and settlement times from weeks to days.

Hyperledger Fabric Technology

Due to its maturity, the platform has been built with IBM on the blockchain powered Hyperledger Fabric from the Linux Foundation. This platform will enable B3i to provide secure, confidential and efficient transactions and the ability to scale and govern the network, preparing it for production deployment.

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The key features and architectural principles are:

  • Excellent privacy and security features
  • Suitability for complex business logic and a modular software design
  • Out of the box supports for smart contract lifecycle management
  • Pluggable components providing flexibility to consensus algorithms and other features
  • New industry best practices developed in respect of the novel technology stack applied