The Blockchain Insurance Industry Initiative (B3i), a consortium of leading insurance and reinsurance companies seeking to collaborate on blockchain powered solutions for the industry, is seeking more members and to expand its remit.
According to Reuters, the B3i initiative is looking to add more members, with reinsurance firm Swiss Re (a founding member) saying that several new members will be announced in the coming weeks.
As well as expanding to bring more of the reinsurance industry into the initiative, the B3i is also considering establishing an operating entity, that could provide some form of clearing or exchange like services.
The Reuters article explains that B3i “could create an organization to manage contracts and claims” as soon as 2018, and that B3i members see “potential for an organization that could take on an exchange role,” which Reuters said could be similar to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system for inter-bank transactions and transfers.
In the world of insurance technology (InsurTech) the blockchain is truly king, in terms of the potential to make a radical difference to the way reinsurance firms operate and the way transactions are entered into.
Blockchain has been cited as a $10 billion opportunity for the re/insurance industry, able to make processes more efficient and ultimately save the sector money.
So it’s no surprise that in the InsurTech world blockchain can generate the most buzz, and gets the most interest from large players. It also means that there is a desire to ensure that systems that are built are done so for the industry and by the industry, hence it’s not a surprise to hear that incumbents may seek to create the industries trading exchange equivalent.
Whether re/insurance industry participants controlling the re/insurance industry exchange and clearing house is a good thing, or not, is debatable at length. Some would say that an exchange or clearing house needs independence from the market participants who would use it.
It’s also debatable whether re/insurance industry incumbents are actually the best placed to create such an entity, given the industry can tend to be hampered by legacy and innovation is clearly in pockets, rather than embraced wholesale throughout the sector.
But any progress that enhances and brings closer industry wide adoption of blockchain, proper standards, transactional simplicity, execution speed, and, through blockchain’s ledger technology, transparency and record-keeping, can only be a good thing for the market.
