Global insurer Allianz and Swiss Re, an international reinsurance company, have successfully placed the world’s first legally bound catastrophe excess-of-loss (XoL) reinsurance contract on distributed ledger technology (DLT), enabled by B3i Re’s live production network.
The industry-led blockchain initiative, B3i, has been developing and enhancing its platform and solutions for some time now, as it looks to solve common market problems without adding further complexity in internal processes.
B3i Re, the company’s reinsurance solution, formerly the Cat XoL product, has evolved in recent years in response to requests from B3i customers, and it’s the B3i Re DLT live production network that enabled this transaction.
The placement covers one of the core catastrophe reinsurance contracts of insurer Allianz, including key submission parts, final terms, and contractual clauses binding to both parties signing this transaction.
B3i notes that the respective process was finalised by both Allianz and Swiss Re digitally signing the contract at the start of 2022.
This “significant milestone”, says B3i, is the next natural step for the two members of the B3i ecosystem, and followed extensive and industry-wide testing which had been facilitated by B3i.
A statement on the placement says that both participants in the transaction identified a range of advantages on the legal, technical, and operational side of their business.
The contract is legally binding and meets the corporate requirements of both parties. And, for the very first time, provides participants with certainty over this type of DLT-contract, in a regulatory compliant manner, to comply with obligations raised by regulators.
Additionally, B3i states that technical implementation adhered to both Allianz and Swiss Re’s corporate security and technology policies, and respective internal requirements. The company adds that by fulfilling the business and regulatory requirements of contract certainty and legally binding, it allows for both transparency and trust in the process.
Furthermore, participants in these placements can also recreate the contract directly from counterparties’ nodes, safe in the knowledge it cannot be changed, which B3i says helps to build the necessary resilience into corporate systems.
Jan Stoermann, Chief Underwriting Officer at Allianz Re, said: “The signing of the first legally binding reinsurance contract on the B3i platform is a step into the future for Allianz. It showcases the capabilities of the platform which we plan to expand on: we will explore how to further integrate B3i’s platform into our transactional processes such as accounting and claims management.”
Theo Bachmann, Head P&C Centre Reinsurance at Swiss Re, commented: “We are excited by the exchange and signing of an in-force P&C treaty structure and wording via the private & secure B3i network. It is a further step in the journey to modern, efficient, and effective management of (re)insurance treaties.”
John Carolin, CEO of B3i Services AG, added: “This global first marks another significant milestone in our journey. Absolute contract certainty has arrived. We are delighted to be able to generate the benefits articulated by our customers and industry front runners Allianz and Swiss Re, and this outcome is a testament to the collaborative way in which our customers shape our products.
“Our B3i Re solution has matured over the last years and today, with its extended functionality, compliments current market practices, has broad application and blazes the trail of digital transformation. Thanks to the pioneering work by multidisciplinary teams across B3i and its stakeholders, the multitude of benefits, including compliance and efficiency gains, is now available to large and small customers.”