Blockchain adds certainty, security and speed.
When a transaction gets executed in insurance and reinsurance, there are multiple parties—especially in reinsurance, it is usually a multiparty transaction. By using distributed ledger technology, we can avoid counterparties’ recording their own version of “the truth” on their systems and then having to deal with the inefficiencies and complexities and reconciliation. All that can be eliminated if distributed ledger technology is used to recall the transaction; that then can be used by multiple parties. That is the near-term application of this technology.
Second, we can work with R3 to solve some specific issues, such as bringing efficiency to the back-office process. R3 has a DLT platform called Corda, and we are working on a prototype using that platform to see if we can create this DLT framework to improve back-office efficiency. That is a two-pronged approach from our perspective. It’s staying on top of the developments—and R3 is a great resource for that because the consortium includes many banks and insurance companies—and then doing this private project work with them to create efficiency in the back-office processes.