The Reinsurance Solutions arm of Aon, reinsurance broker Guy Carpenter and other industry partners, including RenaissanceRe and Everest Re, have worked with The Institutes RiskStream Collaborative on the use of distributed ledger technology (DLT).
According to an announcement, the joint effort targets the delivery of greater efficiency to the placement of reinsurance through DLT by leveraging advancements in both blockchain and DLT technology, as well as existing industry standards to harmonise the approach to digital reinsurance transactions.
The organisations have successfully tested a proof of concept to digitally and securely distribute submissions and receive quotes, leveraging DLT technology. It’s been revealed that the project was built on RiskStream Collaborative’s Canopy framework and made good use of ACORD data standards.
“There has been tremendous hype around blockchain in our industry, but few results to date. This is a very practical use case perfectly suited to a blockchain; multiple parties adding data, building upon the last until an agreed contract is formed through consensus. This shared single version of the truth brings immediate efficiency to the process while laying the foundation for further smart contract automation on downstream processes,” said Bob Olson, CIO of Aon’s Reinsurance Solutions unit.
Now, the project is moving to the next phase of development through a RiskStream working group, which invites contribution from member carriers, brokers and reinsurers.
An announcement states that the next phase is designed to digitise the reinsurance placement process, with the end goal being streamlined, efficient interactions within the reinsurance marketplace through the establishment of secure digital methods and processes to manage treaties.
John Crichton, Chief Information Officer, Guy Carpenter, added: “This project is an important first step in the path to improving transactional efficiency and creating value for our clients through blockchain. We believe an open platform that is supported by industry stakeholders will maximize adoption, which is so critical to the success of any new technology.”
While Christopher McDaniel, President of The Institutes RiskStream Collaborative, commented: “Distributed ledger technology has the potential to decrease costs, simplify processes and increase data security across all areas of risk management, and reinsurance, in particular, stands to benefit significantly from this technology.
“The best solution for the market and for reinsurance buyers is to build a successful solution alongside brokers, reinsurers and carriers. Each has a vital role to play and DLT can provide efficiencies to all participants.”