B3i, the blockchain consortium made up of 38 leading insurers, has announced it is to become a company, allowing it to legally sign contracts, raise capital, and distribute its platform to global insurers and reinsurers. This could prove to be a turning point, transforming blockchain in insurance from a few case studies to a key platform.
The group had created a working blockchain prototype in 2017, for applications to be tested on.
This was seen as a significant step forwards, as it enabled tech companies to trial products in a working environment for the first time. This prototype proved that the technology could enable insurers to save as much as 30% of their time on administrative tasks.
While blockchain remains at the prototype stage for the UK insurance industry, there are prominent examples of how it is already being used around the world.
The Chinese market is particularly advanced, which was highlighted in March 2018 when Huawei announced it had signed a partnership with Che Che Technology and Hai Lian Jin Hui to create a blockchain-enabled platform for insurance innovations.
It is to be built via Huawei’s cloud and will be open to insurers that are existing cloud members as well as new groups, which will be able to add insurance products to the platform.
Furthermore, China Construction Bank announced in September 2017 that it is launching a blockchain application specifically for its bancassurance channel.
It is attempting to improve the customer experience by increasing transparency and reducing processing times. Technology company IBM is providing the technical side of the project.
Outside of China, there have also been examples in the US, notably from insurance start-ups. One emerging market that blockchain is impacting is the home sharing market, after housing rental start-up Bee Token partnered with financial services platform WeTrust, in January 2018, to offer decentralized insurance for security deposits.
The two start-ups will share information with each other over the digital ledger and incentivize good behavior among users by providing their data on trustworthiness and creditworthiness, with the aim of reducing the insurance cost for property damage.
Despite a reasonably high level of hype around blockchain and its applications in insurance, case studies remain relatively sparse. However, the number of working examples are undoubtedly picking up.
Cases to date have come from both global insurers and technology companies, such as AIG and IBM, to start-ups in niche markets, indicating that blockchain can have an impact across the whole industry.
The news that B3i is to become a company suggests that more substantial moves are on the verge of happening in the global market, with a range of leading insurers invested in the former consortium.