B3i successfully completed its first product, a blockchain prototype for property cat XoL reinsurance contracts, in mid-2017. This product was chosen as it represents the simplest form of contract on which to base our development and test the capability and viability of the technology. Concurrently, we have also developed common standards under which this and other products will operate.
The objective of this POC was to test the viability and scalability of the technology and the business value for the industry. Following an agile and collaborative development framework, we completed testing of this prototype in October 2017 through a collaborative market wide network of 38 insurers, brokers, and reinsurers.
This market testing program provided high quality feedback on the functionality, scalability and robustness of the product. It also demonstrated that transactions could become quicker, more efficient, and more secure than with current methods.
The product will continue to be developed during 2018 with the first live trades on the platform anticipated by the end of the year.
Looking further forward, we will gradually expand applications across the industry value chain. New projects in the future will focus on reinsurance and commercial (B2B) propositions.
Market wide testing
Blockchain is a mutual distributed ledger and by definition works best among a network of peers. We have to do this together as members and non-members of B3i to develop the necessary standards. The cooperation also ensures that we focus on solutions that add value and ultimately benefit our clients.
Beta-testing of our prototypes will also rely on market wide feedback from primary insurers, reinsurers and brokers. In future, B3i customers and community members will be invited to participate in beta testing and parallel runs as we continue to design and develop new products.
What does blockchain do for us?
Blockchain technology provides a platform to achieve significant efficiencies by establishing a single and shared version of the truth through a distributed ledger. It also facilitates cryptographic security and the opportunity to develop smart automated contracts.
As a result, we expect financial transactions will settle faster, cheaper, more transparently and with less operational risk. The benefits of using blockchain could come through enabling more efficient business processes across multiple stakeholders without “full trust” in each other. Through lowering the cost per transaction of insurances, we also expect the technology to increase competition and open new revenue streams and market segments.
The consequence is that we expect higher levels of service, better client experiences and improved working capital management. In addition, further innovation will open new markets for growth opportunities to meet currently uninsured needs. Increased trust across the value chain will be enabled by through improved quality of data, information and transparency.
The original organisation was formed under a Memorandum of Understanding. This enabled the 15 founding members to share costs and resources efficiently and deliver a rapid prototype development.
All activity was overseen by a steering committee which governed the work undertaken by sub-groups in product and technology development, strategy, marketing and legal & compliance.
In March 2018, B3i transitioned into a legal entity domiciled in Zurich to better manage the operational implications of having a live product in the market including technology support and further research and development. As an independent legal entity with its own capital and Intellectual Property, B3i Services AG can streamline the development, testing and commercialisation of blockchain solutions.
The incorporation of B3i Services AG is the starting point for the next stage of the initiative. The company will be raising additional funds from a wide spectrum of insurance industry participants over the coming months.
Future participation in B3i will be through shareholding or as a customer, partner or community member.
As we develop plans for our new organisation in 2018, a new governance structure will be designed in line with the operational and developmental objectives. This governance will steer the ownership and management of the B3i platform, as well as the governance of user and community groups.
We will communicate the new structure, governance and details about participation in B3i as soon as plans permit. In the meantime, you can register your interest with us at any time. Please see the details of how to get in touch on the “Contact us” page.