RGAX, a subsidiary of Reinsurance Group of America, Incorporated, has partnered with primary carrier Mutual of Omaha to explore reinsurance workflows powered by blockchain technology.
The parties completed a proof of concept that the allowed them to experiment with the automation of reinsurance transaction using distributed ledger and smart contract technology.
The project aimed to demonstrate how smart contracts can execute rules based on a reinsurance treaty.
With Mutual of Omaha as the ceding company, the primary use case involved processing monthly premium transactions based on risk sharing rules in the reinsurance treaty.
The rules triggered premium payments on a quota share basis, based on a policy effective date, and reconciling these changes across all parties of the transaction in a distributed, decentralized system of record.
“We see growing support from the insurance industry for distributed ledger to streamline many of the manual insurance processes,” said Mitch Ocampo, Chair of the RGAX Distributed Ledger Team.
“With this technology, we hope to modernize data transfer across the industry by automating repetitive manual tasks, reducing administration effort, and better structuring data,” he explained.
“The space is changing daily, but today, the promise of using smart contracts to automate manual steps and simplify data transfer is real.”
Ocampo continued: “Our joint collaboration with Mutual of Omaha shows growing market interest to test various scenarios like counterparty risk transfer, and we are optimistic about the shared learnings and outcomes. There is so much more to explore, and we’re excited to walk this path shoulder-to-shoulder with our clients.”
James Davenport, Senior Vice President of Finance at Mutual of Omaha, also commented: “Mutual of Omaha launched this joint effort to explore the art of the possible and experiment with test data in distributed ledger and smart contracts as we continuously look for ways to leverage technology for the benefit of our customers.”
“Although this technology is still in its early stages, there are clear opportunities for innovation, some of which may radically change the way the insurance industry conducts business,” he added. “We look forward to working more with partners like RGAX to lead this innovative work in the insurance industry.”