B3i blockchain insurance tests successful, now prepared to go live
The tests have proven that smart contracts can bring incredible benefits to the insurance industry.
B3i was started in 2016 as a consortium of 15 different insurers to investigate the merits of blockchain technology for the insurance industry. The tests proved to be a resounding success, and B3i has now transitioned from an investigative consortium into an independent legal corporation with the purpose of providing commercial blockchain solutions, starting with its tried-and-tested insurance systems.
In its first stages, the project will deliver internal efficiency gains and benefits for insurers and reinsurers. Those who use it most effectively might have a competitive edge by passing the savings along to customers who want insurance that is better value for their money.
"Up until now B3i has been a collaborative initiative of 15 global insurers and reinsurers who came together in late 2016 to explore and test the potential of blockchain in the industry," the press release reads.
"B3i successfully completed its first product, a blockchain prototype... in mid-2017. Throughout October 2017, a group of 38 insurers, brokers, and reinsurers tested its functionality and robustness. The prototype demonstrated that transactions could become quicker, more efficient, and more secure than with current methods. The first live trades on the platform are anticipated by the end of 2018, with several other products being developed concurrently."
The new product is focused on the reinsurance industry, which is essentially insurance for insurance companies, so that the testing will be more manageable by focusing entirely on B2B insurance.
"The incorporation of B3i Services AG is the starting point for the next stage of the initiative. The company will be raising additional funds from a wide spectrum of insurance industry participants over the coming months. The ambition is to create an ecosystem of products and services developed 'by the market, for the market'."
The consortium included a range of the biggest names in reinsurance, including Allianz, Munich RE, Swiss Re, Tokio Marine Holdings and Zurich.
Gerhard Lohmann, CFO of Swiss Re was appointed chairman of the newly formed company.
"The transition of B3i from consortium to independent company is a concrete step forward to realising the enormous potential of blockchain for the insurance industry," he said. "Personally, I am very excited to be at the forefront of this innovation that has the capability to transform the industry and help make insurance more affordable, accessible and attractive for market segments that are currently disenfranchised, or underprivileged."
The prototype product was a smart contract system for automating settlement of certain contracts and allowing data to automatically flow through the industry where needed. The efficiency gains of up to 30% in the initial testing phase alone show the sheer potential of distributed-ledger technology and smart contracts in an increasingly data-driven world.
"The success of the B3i Initiative is now being manifested in the incorporation of the new company and the realisation of the immense potential of blockchain to positively transform the industry and benefit customers," says the press release.
With its successful product testing and recent incorporation as a legal entity, B3i might now be at the forefront of blockchain applications in insurance. But it's certainly not the only player in that space, and many other consortiums have started up elsewhere.
Some of the big names in commercial marine insurance are doing almost exactly the same thing, and cryptocurrencies like ICON (ICX) specifically launched with the intention of being widely used in the insurance industry. It aims to automate large portions of South Korea's health insurance system sometime in early 2018, while it started implementing internal systems for insurers around the end of 2017.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.
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