The collaboration leverages advancements in blockchain and DLT technology and existing industry standards to harmonize the approach to digital reinsurance transactions. The organizations are commited to driving better outcomes for clients through industry standard capabilities that will streamline the flow and verification of data and reduce frictional costs across the marketplace.
The organizations, along with industry partners including RenaissanceRe and Everest Re, have successfully tested a proof of concept to digitally and securely distribute submissions and receive quotes using distributed ledger technology. The project was built on RiskStream Collaborative’s Canopy framework and made extensive use of ACORD data standards.
The project is now moving to the next phase of development through a RiskStream working group with member carriers, brokers and reinsurers invited to contribute. The intent of the next phase is to digitize the reinsurance placement process with the overall goal of streamlining interactions within the reinsurance marketplace by creating secure digital methods and processes for cedants, brokers and reinsurers to manage treaties.
“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 business.
“This project is an important first step in the path to improving transactional efficiency and creating value for our clients through blockchain,” said John Crichton, Chief Information Officer of Guy Carpenter. “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.”
“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,” said Christopher McDaniel, President of The Institutes RiskStream Collaborative. “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.”
The organizations’ successful track record of implementing digital ecosystems for reinsurance have already positively impacted the market, but there is greater efficiency to be realized by bringing further consistency to the transactional parts of the process. This efficiency will in turn better connect buyers of reinsurance to the broadest markets and capital at the best terms and conditions.