“Digital Fiat Currency” Trials Make A Debut In Insurtech

In recent updates from BIS studies, 80% of surveyed banks were progressing with Central Banking Digital Currencies (CBDC) and almost 40% had started developing proof of concepts. During World Economic Forum’s 2020 event, a similarly high number of countries announced they were underway with research or CBDC was prominently on the radar. Last month, ZhongAn […]

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Chatbots with Blockchain – Plumbing or Showerheads?

Shopping for insurance or filing a claim can be arduous. But not so, when chatbots with conversational interfaces, mimic humans and respond with accuracy, speed and personality. PolicyPal is a Singapore based digital platform that launched a chatbot to allow customers to buy and manage policies conveniently. The bot took in-depth training on 9000 policies, […]

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XBRL News: Blockchain, specifications and ESEF

Here is our pick of the 3 most important XBRL news stories this week.  1 Blockchain and XBRL: The Myth Currently, many jurisdictions around the world require public companies to produce financial reports using XBRL. The myth that blockchain could replace XBRL in the production of financial information is incorrect. Blockchain is not a data […]

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Insights from the holdings of thematic Blockchain ETFs

Mirror mirror on the wall, which public companies of them all, will be first in reporting 10+% revenues from Blockchain?  Will it be payment Fintechs or conventional exchanges, or software tech companies or e-commerce companies?  Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by […]

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Radical Digitization elements from the SICTIC Blockchain Investor Day

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019. I had the pleasure to moderate the annual SICTIC Blockchain investor event which was a collaborative initiative to highlight and support innovation. SICTIC and its event partners, Innosuisse and Trust […]

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Ten highlights from Mainnet2020 by Messari

Screen Shot 2020-06-01 at 18.19.53

I had the pleasure to attend some sessions from the Mainnet 2020 event last week. Ryan Selkis`s guitar playing as an alternative signal to wrap up the talk or the panel, was one of my favorites.

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019.

Messari, looks like a data, news, research business in the cryptocurrency, blockchain space. But what is not evident (yet) to everyone is their vision and how they are executing on it. They are very much focused on Transparency and an open-source approach. Ryan said Messari wants to become the Edgar in the new economy.

EDGAR is the Electronic Data Gathering, Analysis, and Retrieval system used at the U.S. Securities and Exchange Commission (SEC).

The Messari Disclosures Registry has been launched already. It is an open source disclosure database that aims to become a central repository for project information, freely accessible.

Messari is API centric because the vision is to become an enabler for different players in the new economy to build tools, analyze and educate through the Messari APIs.

My Ten highlights from 4 hours of attending Mainnet2020

1-One of the top objections to cryptocurrencies – volatility – got taken care of from COVID19.

2- On top of that, in this no-yield macro-environment, another objection got taken care of. And the Irony is that staking is on the rise and we are moving towards POS (proof-of-stake) as a preferred consensus mechanisms. Staking grew 1300% in 1.5 years.

3- Stablecoins may seem at first site just an alternative to digital payments. They are actually much more. Their use case is relevant to advertising and to e-commerce.

Also, if we look 5-10yrs into the future, there will be no fees in digital payments. So, what is the business model of the Transferwise`s of the world? Digital payments will no escape the zero-fee spiral.

5- The digital assets space continues to receive endorsements and oppositions; and this will not change soon. The wealth management division of Goldman Sachs put out a presentation that advised clients to avoid Bitcoin in their portfolio holdings. Cryptocurrencies are not an asset class.

At the same time, Rentech (the hedge fund that continues to be able to charge 4/40) is stepping into Bitcoin futures; coupled with the endorsement of billionaire Paul Jones who publicly stated allocating 1% of his wealth.

6- Ark Invest, the first publicly traded ETF that allocated to Bitcoin early on, is launching a private alternative offering dedicated to cryptocurrencies. Their investment thesis is that a few cryptocurrencies will capture the majority of value.

7- Paxos is a regulated financial institution, unlike other issuers of stablecoins. PAX, is their own USD backed stablecoin that is self-regulated. Paxos wants to be enabler for others to issue stablecoins. Binance has chosen them for their own stablecoin.

8 – The smart contract market is very crowded. The current reality is that blockchain projects are competing for developers and users.

9- The Bitcoin blockchain is being continuously improved to make sure that it remains robust. The philosophy is that is should become a very simple base chain, so that it is very robust. So, that means minimizing what is on chain.

10 – And I have to finish with the reason that Market Capitalization of cryptocurrencies is NOT a reliable measure these days. Several speakers agreed on this and called for more transparency in the block creation process. There is a need to audit the ledger because in many blockchain the block creation is an opaque process.


EDGAR is the primary system for submissions by companies and others who are required by law to file information with the SEC. 

Containing millions of company and individual filings, EDGAR benefits investors, corporations, and the U.S. economy overall by increasing the efficiency, transparency, and fairness of the securities markets. The system processes about 3,000 filings per day, serves up 3,000 terabytes of data to the public annually, and accommodates 40,000 new filers per year on average.

EDGAR® and EDGARLink® are registered trademarks of the SEC.

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Breaking Banks, Silos, or Networks: which is harder?

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019.

In innovation, we frequently talk about `Breaking Silos`, one of my favorite cross-disciplinary topics. This past weekend (unusually warm and sunny creating the temptation to be outside) I was ironing as there is no cleaning lady anymore and listening to Episode 19 of `Breaking Banks Europe`. This one was hosted by Matteo Rizzi and Spiros Margaris and with an Ecosystem Zoom into Luxembourg. And who better to discuss this with, than Nasir Zubairi, the CEO of The LHoFT– the Luxembourg House of Financial Technology.

I recalled meeting briefly Nasir for the first time at SIBOS in Geneva in September 2016, before he had given birth and baptized LHoFT. [ SIBOS size conventions may take really long to happen again if they ever happen in that globalized format.] Today we are looking at 4 years of an important ecosystem stakeholder, The LHoFT, whose role in Luxembourg has been vital. Luxembourg is like perfumes that come in small bottles and has distinct top global roles in the fund industry, in green finance, and microfinance (to name a few). As a result, Regtech is a big focus for the LHoFT, especially around anything related to funds. We can actually think of Luxembourg as a predominantly B2B fintech hub with an interest in fund administration technologies, payments (always a core component of finance), and lately blockchain for capital markets. Nasir mentioned a few names of Blockchain4Finance companies in Luxembourg during the podcast, like Tokeny, StokR, FundsDLT which are focused on Tokenization. Such companies are leading the way for the evolution of Capital markets which includes the fund industry.

FundsDLT is a homegrown initiative that I have covered before (Sep 2019) in `Two live Blockchain use cases in Mutual Funds administration and four pilots` along with Calastone and other cases. Just last month FundsDLT announced the closing of a Series A investment to develop a Decentralized platform for fund distribution. Clearstream, Credit Suisse Asset Management, and Natixis Investment Managers were the investors that joined the seed investor the Luxembourg Stock Exchange.

Nasir also highlighted The LHoFT CATAPULT 3rd cohort which is focused on African Fintechs for financial inclusion.

Catapult: Inclusion Africa 2020

► A-Trader – Tanzania

► A-Trader – Tanzania

► CinetPay – Côte d’Ivoire

► Dundiza – Tanzania

► Esusu – Nigeria

► Eversend – France

► Exuus – Rwanda

► OZÉ – US & Ghana

► PaddyCover – Nigeria

► People’s Pension Trust – Ghana

► Pezesha – Kenya

► SmartTeller – Nigeria

► SympliFi – United Kingdom

► uKheshe – South Africa & UK.

Zooming out of Luxembourg as a Fintech ecosystem

Nasir`s tweet from last week about the persistent use of Fax machines in financial services, highlights that it is difficult to Break the network effects that are ingrained in financial services. Calastone confirms the challenges from the use of fax machines in fund distribution, during this global abruptly forces shift to remote working.

The Global Fax market is growing. Part of it is on the Cloud but a significant part of it stubbornly uses standalone fax machines. Business workflows are networks that cannot be easily Broken. If your supplier, or customer, or service provider uses-requires a Fax, you will too. Breaking those networks is very hard. If we don’t manage to get rid of fax machines during this crisis, when will we?

A 2017 IDC report on the Fax market showed that 36% of fax volume (monthly pages) was sent or received using standalone fax machines, which is more than the fax volume sent or received using all other fax technologies.

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The same report showed how the West (naturally) has Fax networks that stronger and more difficult to break. In North America, for example, 88% of respondents expect fax usage to grow or remain steady.

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Finance is not as bad as manufacturing in terms projected usage of Fax. However, a 20% increases was projected.

Screen Shot 2020-04-06 at 11.28.37

The top reasons of usage and expected growth of usage are that

  • Fax is an integral part of workflow – Networks
  • Fax is evolving and integrateable with email – Digitalization
  • Fax is secure, compliant and with a verifiable receipt – Compliance, Traceability

Culture eats software. While innovations in Regtech and Blockchain for Capital markets are advancing, those pushing these innovations are challenged by a financial world that uses Faxes for trade confirmations of all sorts of assets, fo receiving mortgage and all kinds of loan applications, processing claim forms in insurance etc.

Breaking business flow networks that operate in a certain way, is difficult.

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`Before me, everything was done manually` says the `Blockchain` Figure muppet

Screen Shot 2020-02-24 at 08.04.36Meet the new mascot “Blockchain,” a puppet that Figure Technologies has created for their video ads aiming at the masses who should consider the benefits of HELOCs on the Blockchain.

View the video ad campaign here.

Figure Technologies is a 2year old San Francisco-based startup that is well funded and focused on changing the entire life-cycle of Loans and beyond. From loan origination to servicing, and securitization. They started servicing the needs of homeowners who have most of their wealth locked in their homes with the so-called HELOCs (Home Equity Line Credit).

The technology they have built is slowly and methodically, being piloted and used in different use cases.

Figure Technologies is eating its own dogfood. Crunchbase reports an eye-popping total funding amount of $1.2billion. This includes a credit facility of $1billion from investment bank Jefferies and WSFS Financial Corporation, the parent of WSFS Bank. This financing facility (May 2019) is custodied and serviced on the in-house Blockchain that Figure Technologies has developed, called Provenance Blockchain.

In the summer of 2019, Figure Technologies launched its $20 million Reg D security token offering, the HASH token, also using the Provenance Blockchain.

Figure Technologies is cofounded by Mike Cagney, the founder, and ex-CEO of Sofi, with his wife June Ou (ex- CTO at Sofi). Undoubtedly, Figure Technologies is targeting the same market that Sofi targeted (refinancing debt). It can be seen as the Blockchain competitor or it can be seen as the technology company that will make it easy for Sofi to migrate to a blockchain infrastructure when the time is right.

Current product offering of Figure Technologies

Screen Shot 2020-02-24 at 10.31.05

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019.

You get 3 free articles on Daily Fintech. Get all our fresh content and our archives and participate in our forum, by becoming a member for just US$143 a year.

On the other hand, the target market is huge and maybe the two companies stay separate as Sofi grows its platform beyond refinancing loans and into wealth management.

Figure Technologies presents a huge global opportunity in private markets. They estimate savings via their Provenance blockchain (Provenance benefit figure) and revenues on the Provenance blockchain (Provenance Opportunity figure)

Screen Shot 2020-02-24 at 10.09.07

Provenance Blockchain

The in house blockchain is public but permissioned. The participants are: The members that transact on the Provenance blockchain (which include the HASH token holders), the Node hosts, the administrator, and the omnibus banks that take care of the fiat bridges to the Provenance blockchain.

The consensus model is from Hyperledger. More details in the Provenance white paper.

HASH token

A great example of a hybrid token that would not be possible in the current financial infrastructure. HASH has equity like attributes and voting rights.

HASH token holders receive directly (digitally) fees from the members that transact on the Provenance blockchain (are you salivating while looking at the Provenance Opportunity figures?).

They also vote for the administrator.

Also HASH has staking functionality for the nodes. Each node has to put up a stake of HASH on which they will earn the return for their services.

Details regarding the allocations and the economics are found the Provenance white paper.

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Pulling back the curtain to shine light on ‘scary’ insurance phrases


Reinsurance/ILS, Blockchain, and insurance financials.  Not quite lions, tigers, and bears, but for many who follow insurance the three concepts are as daunting and pose discomfort in understanding. Why then the mention?  Because in an earlier social media post I noted that the three words do not generate a lot of media content traffic, and if there is a related posting, not much response.  A wise connection dropped the key hint to that puzzle- the words need to be discussed in context that makes sense to the reader.  A cool idea, Modern Accelerator .

Patrick Kelahan is a CX, engineering & insurance consultant, working with Insurers, Attorneys & Owners in his day job. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.  Image

Let’s dive into the three concepts with a full recognition that this blog will serve merely as an overview and whetter of appetites causing the readers to want to consume more. Fair warning- even keeping the topics brief- TL:DR may apply.  That’s OK.

Insurance Financials

There is plenty of government oversight for accounting that dovetails with plenty of regulation, we can’t touch on all the respective countries’ agencies and regulators but in essence they all serve the key roles of making uniform 1) how insurers account financially for their business, and 2) how insurers account for how solid they are in being able to serve their policyholders relative to the agreed scope and cost of risk.

It’s an alphabet soup of government orgs or standards: GAAP, FASB, SAP, IRDAI, NYDFS, SEC, IFRS, FCA, FSDC, SUSEP, NAICOM, ICLG, ASIC, APRA, etc. (almost) ad infinitum.

Fundamentally there are three accounting principles (of the many) with which insurers must comply, just in a slightly different manner from most business organizations :

  • Revenue Recognition Principle
  • Matching Principle
  • Historical Cost Principle

Without complicating things too much, insurance companies have financial stability burden to prove continuously- a carrier’s ability to fund the risk costs that it has agreed to.  All those policyholders have an expectation of indemnity or payment if a loss or occurrence to which their policy agrees to cover /pay comes to fruition.

The three principles noted above are part of the key differences between insurance companies and others, primarily because what insureds receive for premiums is a risk agreement that elapses over time.  Receive $1000 for an insurance contract today for twelve months’ cover.  Money in the bank for a promise over time.  So in respect to compliance with the Matching Principle, premiums are deemed  ‘written’ only until an increment of the policy’s time is expired, wherein the portion of the premium that matches the period is booked as ‘earned’.  One month’s policy duration allows 8 ½% of the written premium to become earned, six months’ earns 50%, and so on.

So you can see how a carrier with a ton of cash on hand might not be as liquid as one thinks if there are an according ton of policies on the books whose expiration extends over twelve months or more.  Written and earned- key concepts.

Here’s an example of a P&L statement showing the written and earned premiums, from German insurer, DFV_AG or Deutsche Familienversichurung:


The sharp eye will note in addition to written and earned premiums there are lines showing the ‘Share of reinsurers’; that will be touched on in the Reinsurance portion of our discussion.

Traditionally the written and earned difference followed a solid calendar pattern due to typical annual expiration of polices.  But what of on demand or ‘gig’ policies?  The covered period may be a few hours or days, so there is little lag between written and earned status.  Knowing a carrier’s business model has become more important than ever since a heavily funded entrant’s cash may be more restricted if it’s a traditional style insurer in comparison with an on-demand player.

Carrying the discussion to the Matching Principle (matching costs to the period in which the costs were incurred) suggests a few important financial factors:

  • Costs of policy acquisition is matched to immediate written policy premiums, e.g., agency/brokerage commissions, marketing, admin office costs, digital format costs, etc., but
  • Costs of policy administration, e.g., adjusting expense, loss costs paid, etc., may be charged to earned premiums in a different incurred cost period.

As for the Historical Cost Principle, regulators want to know concretely what amount a carrier assigns to portfolio assets.  Insurers need to be liquid in their asset portfolio so assets can easily be converted to cash if loss payment volume so demands.  For example, bonds might fluctuate in value over time due to variances in interest rates, but carriers need to maintain a historic cost to keep regulators content for solvency calculations.

Quite a rabbit hole are financials, so the conversation will conclude with THE common comparative measures for P&C carriers-  loss ratio, expense ratio, and combined ratio.  These measures will give the reader a clear idea if earned premiums (revenue) exceed or are exceeded by expenses and loss cost.


loss ratio = claim payments + adjustment expense/earned premiums, expressed as a %

expense ratio = expenses other than adjustment expenses/earned premium. Expressed as a %

combined ratio is a sum of the LR and CR.

Ideally CR is < 100%, meaning earned premiums exceed costs and underwriting activity is profitable.

What must be remembered as carriers are compared- the maturity of a carrier in terms of time in business, how aggressive is growth relative to existing book, the nature of the carrier’s business and how that affects reserves (immediate draw on profits.)  Entrants may have LR that are in the hundreds of %; consider trends or peer comparisons before your lose your mind.


Reinsurance is insurance for insurance companies.  There, that was easy.

Rei was once an easier financial concept to grab- carriers would sign treaties with reinsurance companies to help protect the primary insurer from loss outcomes that exceeded typical loss expectations.  Primary carriers do not plan (or price) for an entire region to be affected at the same time, but sometimes things happen that require excess over planned loss payments, e.g., wind storms, wildfires, tornadoes, earthquakes, etc.  Primary carriers will purchase reinsurance that for a specific period, and in an amount that is triggered once a carrier’s loss payments for the treaty peril or perils is incurred.  Pretty direct and expected by regulators, and part of claim solvency calculations.

What has occurred over years is that reinsurers have evolved into other types of excess risk partners, covering more than just catastrophe losses, and becoming excess risk options.  If you again review DFV_AG’s income statement and consider the premium and loss cost portion of the carrier’s P&L shared with reinsurers, you’ll understand the firm has ceded premium and costs to backers to help smooth growth and provide backstop to the firm’s ability to pay claims and serve its customers.  This has become a common methodology for startups and existing carriers, allows more product variety for reinsurers and spread of risk.

Another evolution over the past years beyond reinsurance is the advent of Insurance Linked Securities (ILS), capital vehicles that are designed solely as alternative risk financing.  Insurance-linked securities (ILS) are derivative or securities instruments linked to insurance risks; ILS value is influenced by an insured loss event underlying the security.  What’s that?  ILS are capital vehicles that simply are designed to pay on an outcome of a risk, e.g., hurricane, earthquake, etc., sold to investors looking for diversified returns in the capital markets.  A hedge against a risk for insurers, an option for better than normal market returns for the holders.  Often referred to as Cat bonds, these bonds serve an important role in the risk markets, and are an opportunity for holders for income.  Often ILS are sliced and diced into tranches of varying risk bonds to smooth the outcome of a linked event.  Don’t be surprised if ILS become a more accepted means of financing more common, less severity risk within the industry, or in use in unique new risk applications, an example being pursued by Rahul Mathur and colleagues.


So much promise, so much confusion, overreach and failure to launch.  Or maybe Blockchain’s connection with the perceived wild west of value transfer, crypto currency, has colored the insurance world’s relative arm’s length view of the concept.

A quick search of definitions produces many references to bitcoin and other crypto currency (I’ll leave those to my knowledgeable Daily Fintech colleagues), but we simply want a definition that maybe doesn’t sound simple (Wikipedia):

“By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority. Although blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. “

Open. Distributed. Peer-to-peer. Decentralized. Immutable. Cool for generating crypto, but not so much for the wild data sharing needs of insurance.

So why is Blockchain not taking hold for insurance?  The use case is tough for carriers- unstructured data (of which carriers have a ton) do not play well in a Blockchain (Blkcn) environment, many changing players in an insurance claim, and so on.  Blkcn holds data securely, but doesn’t guarantee cyber security outside the ledger. Blkcn can be more cumbersome for data retrieval across consortia-based ledgers.  Multiple writers to the ledger, multiple efficiency issues to overcome.

But what of uses for reading data once placed in the ledger? Can be very cool. Anthem is a US health insurance provider serving millions of subscribers nationally, the company recently initiated a Blkcn pilot wherein the company is making ledger access an option for the test participants, with patient records stored in the ledger, and individual subscribers given the option to give providers access to health records via use of a QR code that has an expiration date.  Subscribers have the power over their records and access is given for read only permission.  There are many potential benefits to health insurance Blkcn but the options must dovetail with data security.

Another positive scenario for Blkcn application- crop insurance in previously under-served markets.  OKO Insurance provides micro crop insurance policies in Africa, backing by reinsurance but administered in part by distributed ledger, each farmer’s information residing in the ledger, and access provided to underwriting and reinsurance.  And- if payment is made a partnership with digital payment systems to facilitate settlement.  An active Blockchain as a service company, BanQu, is expert at facilitating these frameworks and has a portfolio of projects around the globe where ‘first mile’ and ‘last mile’ data are administered within a ledger for the respective customer and its affiliates/suppliers.  Permissioned but not written by multiple players, QR codes to allow involved sources access to a supply chain.  And the sponsor of the ledger has a clear data record of each step in a supply or value chain.  Speaking with the firm’s business development executive, Brady Bizal, we discussed how a Blkcn ledger such as BanQu provides could serve as an ecosystem initiative for regions, including the details of insurance for a farmer, payment records, link to in country digital payment systems, risk mitigation firms, and as warranted, the transaction/finance data can be accessed by permissioned bankers at the customer’s choice- the magic of QR codes.  It’s an entrée to a trust system that may otherwise not exist.  Opportunity.  Maybe not the original thinking for Blkcn and insurance, but sit for a few minutes and you will think of many similar possibilities for blockchain use in health insurance alone.

Sorry, there is so much that could be written about the three concepts and I’m hopeful the article answered some questions about finances, blockchain and reinsurance/ILS.  It’s certain readers and experts will advise me of missing sections, and that will be the foundation for a next article on the subjects.

You get three free articles on Daily Fintech; after that you will need to become a member for just US $143 per year ($0.39 per day) and get all our fresh content and archives and participate in our forum.


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Speaking of Blockchain, what of its place in insurance?


I’ve felt as an orphan child within the Daily Fintech family, at the end of the common table but the uncomfortable ‘outsider’ because the content I produced for publication was not Fintech or Blockchain oriented.  The Insurtech content has always been embraced as an integral part of the blog, but like the student who does not quite know how to affix the sash on the uniform I have been feeling a little insecure.

Patrick Kelahan is a CX, engineering & insurance consultant, working with Insurers, Attorneys & Owners in his day job. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.


Hard to believe that lede?  Should be, and is.  My DF colleagues are experts in what they write of- finance, crypto, and by extension, Blockchain, and collegially embrace the InsurTech discussions.  So not under any pressure to do so but having an intellectual and industry curiosity I figure it’s time to discuss insurance and Blockchain- unmixed oil and water, or tasty salad dressing?  Blind dates or maybe life partners?

I am privileged to have insurance connections/colleagues who understand Blockchain and are willing to share perspectives, so I reached out to several for background and explanation.  See, while I am no expert at Blockchain (BKCN), crypto, distributed ledgers, etc., I do understand the basics, and have yet to find a ‘tipping point’ application of the principle for insurance.  One might figure if there was, a 5 trillion USD industry would have integrated the idea already.  Instead, there are rumblings of the benefits of BCKCN but few projects at scale.

Consider some projects with traction (thanks, Walid al Saqqaf, Insureblocks founder; readers can find these ideas and many others at his podcast, https://www.insureblocks.com/):

  • Addenda, an insurance subrogation solution founded by CEO Walid Daniel Dib, and located in the U.A.E. Addenda has developed a BKCN alternative to what has always been a manual process fraught with delays and errors, subrogation of claim payments.  The decentralized, trusted nature of BKCN lifts much of the existing barriers to efficient subrogation settlement through placement of immutable records of the loss that the parties can mutually access.  With sufficient subscription by companies, is it possible the volume of liability arbitration would be reduced in other markets?
  • B3i– a Property Catastrophe Excess of Loss Reinsurance application, with John Carolin at the helm as CEO. B3i is a vanguard of what might be commonplace for the insurance BKCN future- a Distributed Ledger Technology (DLT) that is owned by 18 insurance market participants, with active involvement by 40 insurance companies, shareholders, etc.  As such the question of who supports the ledger financially is answered, who has participation rights, and how is the common ‘language’ or protocol of data insertion determined.  As John states, placing reinsurance has traditionally been a very analog process, with the height of innovations being email communication of terms and bids.  BKCN through B3i ‘democratizes’ the data, and access to the players, and encourages use of smart contracts with their basis being the set terms within the ledger.  Can this democratization and sharing of costs be expanded to include other types of insurance, and a far broader community of permitted companies?
  • Blockclaim, a BKCN innovator founded by Niels Thonéthat has an aim of clarifying what is now fifty shades of gray (not that one!) that are generated by the many participants involved with insurance claims, and the volume of data that claims generate. Changing a cumbersome multi-lateral, manual/digital approach of claim handling to a permissioned ledger allows concurrent access to immutable claim facts for all involved parties, leading to less cumbersome (read as more prompt) claim handling.  Can this principle also be broadened to include underwriting characteristics for insured property?  One might think so with sufficient mutual ledger support across a spectrum of companies.
  • Ryskex, a “blockchain based ecosystem for alternative risk transfers”, championed by CEO and co-founder, Dr. Marcus Schmalbach. Ryskex stands for ‘risk exchange’, focusing on new forms of identified risk, and/or previously non-insurable risk in a B2B environment.  The firm’s principle- if these unique risks are typically outside an indemnity risk prediction form, applying parametric principles to these risks, in conjunction with AI methods for determining indices and with trigger forms/indices stored within a ledger for transparency and ease of payment, BKCN can facilitate risk vehicles in less insurance traditional forms that capital markets are more apt to adopt.  Can insurance evolve into a capital risk model and less of a peril/indemnity model?  Dr. Marcus makes a case for it.  In parallel with the risk model changes Marcus is supporting a soon to be released book with John Donald, “Heartbeat in the fog – Parametric Insurance for Intangible Assets”.  While this second book of John’s has a focus on newer risks, e.g., cyber, its principles lend well to parametric and BKCN.  And who am I to question its utility, as Dr. Marcus cites John as the “master mind” and “one of the smartest guys I ever met.”   We won’t let Dr. Marcus kid us about being a smart person in the room; his upcoming journal publication that focuses on insurance of 2030 has a fascinating excerpt speaking of an insurer of the future:

if you have sufficient capital at your disposal, you can be an insurer.  Capitalism meets Anarchism- an ecosystem based on transparency and security of blockchain technology…because of a risk trading ecosystem instead of industrial insurance.”

An additional recent insurance blockchain success deserves mention- insurance startup Etherisc’s quasi-parametric project conducted with partner firms Aon and Oxfam- micro-policies for crop failures for Sri Lankan farmers.  Not a direct parametric solution but a transparent form where the policy data and payment expectations resided within a blockchain ledger, and automatically triggered.  Progress.

And are there firms working in the background to facilitate organizations’ migration to blockchain environments?  Yes, of course.  Global consulting firms are actively pursuing blockchain programs as are startups and independents.  A US-based firm, Fluree, is actively developing data platforms for what they refer to as the ‘Fourth Industrial Revolution.’  In discussion with Kevin Doubleday, Marketing Communications Lead at the firm, Fluree (as do many companies) recognizes the traditional database structure of data, middleware, and now APIs is being overwhelmed by the volume and form of data and business processes driven by same.  Many suggest that blockchain is not the ideal option for use in insurance claims processes due to the varied forms of and demands on data (thanks, Mica Cooper and Chris Frankland for that discussion), but as Kevin and I discussed perhaps considering eating the elephant one bite at a time by choosing insurance processes that would have narrow but meaningful applications, e.g., subrogation (as noted above), transparency and immutability that would facilitate anti-fraud efforts, or deed and title data repositories.  Fluree is also focused on having a universal access format that will accommodate all users.  Current users of Fluree’s services includes life insurance solution startup, Benekiva, whose co-founder and all-around smart tech person, Bobbie Shrivastav  introduced me to Fluree.  Quite a bilateral endorsement.

So, Blockchain and insurance, dating but not yet in a committed relationship.  Seems we might be wise to plan a formal ceremony a few years from now when the relationship ‘learnings’ have been resolved.

And, perhaps now I can have a seat at the big blockchain table at DF.  😀

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