Technology company ChainThat has developed and launched a new digital re/insurance placement solution for Bermuda which it is claimed will revolutionise the entire insurance value chain.
The insurance and reinsurance markets in Bermuda have collaborated with several stakeholders to launch a digital re/insurance placement solution in partnership with technology company ChainThat.
The initiative and platform, called RICAP—connecting RIsk to CAPital—is bringing together re/insurance buyers, insurers, brokers, reinsurers, and other service providers using the technology developed by ChainThat.
Built on distributed ledger technology (R3’s Corda), the platform can administer insurance and reinsurance contracts across the entire insurance value chain including placement, accounting, settlement, and claims.
ChainThat was one of the pioneers in using blockchain to support insurance, creating the first ever blockchain-based insurance placement platform solution in 2015. Since 2015, it has evolved the platform’s functionality and tested many different blockchain technologies, finally settling on the R3 Corda platform in 2017 based on enterprise support, security, privacy, and scalability requirements of the insurance market.
How it works
With the RICAP platform insurance contract, accounting and claim data are provided and held only by those parties who are involved in a particular contract process. Unlike traditional models, data is not centrally stored where it could be exploited or monetised by a third party. The distributed ledger technology enforces data-sharing security and privacy from the ground up while ensuring that all parties see a single version of the truth with a complete, immutable and auditable change history.
In keeping with Bermuda’s long history of innovation in insurance and financial services, this ground-breaking initiative will enable cedants, brokers, and capacity providers to efficiently and accurately move data between parties using blockchain technology.
The Bermuda market is leading the charge on the development, testing and adoption of this technology and defining the necessary global standards in recognition of the fact that true efficiencies can be realised only if a way for the entire market to collaborate and establish standards that will facilitate this transformation can be found.
David Edwards, CEO of ChainThat, said: “The excessive expenses and delays that are experienced by all parties of the insurance value chain are not an area for competition but provide the opportunity to collaborate for the benefit of the industry as a whole and to create a more effective market.
“By creating a transactional hub in Bermuda, we can not only help Bermuda continue to lead the global insurance market, but we can leverage this initiative to create proven standards for the business that can be adopted globally.
“Establishing a global insurance transactional network is fraught with challenges but by focusing initially on a Bermuda hub we can effectively work with the stakeholders and the regulator to quickly prove the value and grow business within the Bermuda insurance market and the local Bermuda community.
“The approach to the upcoming production trial is low cost and low commitment but sufficient to allow the market to quickly assess and prove the business value and the adaptability of the platform working closely with the ChainThat team.”
The move has been welcomed by the market, as the comments on these pages testify.
ChainThat has also announced that it has become the first company to join the Bermuda Monetary Authority’s (BMA) Innovation Hub.
This provides ChainThat and RICAP Bermuda access to a BMA representative throughout the production trial, enabling the sharing of information and ideas as the trial progresses which will help determine the requirements for a regulatory framework post-production and entry into the Sandbox if the trial is successful.
For more information about the RICAP Bermuda initiative, or to get involved in the production trial, contact Rebecca Oliver: firstname.lastname@example.org
“RICAP was initially formed out of a group of executives from brokers, insurers, and reinsurers as well as key service providers with more participants coming on board every week as the stakeholders realise that the vision—to invigorate innovative global insurance offerings by accelerating sustainable and scalable transfers of risk to capital—is a vision that Bermuda is uniquely positioned to execute.
“The group’s objective is to include as many participants as possible from the industry to form the marketplace of the future. RICAP also includes a user group who will test and experience firsthand what this new technology has to offer.
“RICAP alongside ChainThat has developed an efficient way to move data that improves transparency, reduces duplication and reconciliation, provides the necessary audit trail, and allows for integration with existing systems.” Kathleen Faries, chair, RICAP Bermuda
“EY has long championed a culture of innovation and investing in new technologies. The success of the InsureWave blockchain platform is a concrete example of where innovative technology is being deployed to drive positive change in the re/insurance industry.
“We applaud RICAP’s purpose and plan to launch this innovative technology making Bermuda the world’s first digital ledger-based risk marketplace. We can see how it will open up new possibilities for how re/insurance enterprises do business with one another, turning complex processes into cost-saving business efficiencies.
“EY is thrilled to support RICAP industry leaders with this important strategic effort”. David Brown, EY Bermuda senior partner and regional insurance leader
“The RICAP platform represents a seismic shift towards a faster, more efficient and contract-certain system of transacting insurance and reinsurance business throughout the entire lifespan of the deal, from submission to placement, policy issuance, and claims.
“Bermuda is the only re/insurance market globally that is nimble enough, with the right intellectual capital and collaborative spirit to change the value chain permanently for the better.” Peter Dunlop, partner at Walkers Bermuda
“RICAP’s collaborative approach to innovation in the insurance industry represents a significant opportunity for the Bermuda market to lead the way to the future. The roster of active participants and their collective enthusiasm provide clear insight into the efficacy and potential of this important initiative.
“We are helping evaluate structures and workflows, with particular focus on exploring downstream audit and regulatory reporting requirements. Broad participation across the Bermuda insurance ecosystem is enabling a full lifecycle pilot from origination through technical accounts.” Arthur Wightman, PWC territory leader
“This is an ambitious project that has great potential for the entire Bermuda market across multiple classes of insurance and reinsurance business. The collaborative approach taken by the ChainThat team has helped to engage many different parties across the different stages of risk meeting capital. This has meant the project is getting a wide base of support from within the market.
“Setting up the trial period will further encourage participation and will really demonstrate to all parties how fantastic this development will be for the Bermuda market.” Nik Lucking, CUO, Helix Global
“It is essential for Bermuda as a market and for us as individual stakeholders, to ensure the sustainability of our business and the continued success of our domicile. The future isn’t a far-off concept. The future is happening as we speak. Technology advancements, outsource models, machine learning and AI/robotics are already imbedded in many of our business models (or being explored).
“Strategic conversations are also taking place around the role of the underwriter, the broker, and everyone in the value chain of the transaction.
Recognising and accepting how these changes will impact our domicile should be no different.
“As a market, to remain valuable and relevant to our clients we must change our mindset. Through RICAP, we have the ability to move into the future together as a market. This solution will support the fundamental shift that must occur in focusing on the value of what we do vs the process of what we do.” Susan Pateras, COO, Liberty Specialty Markets
“While other markets/jurisdictions are talking about similar initiatives, they often face significant hurdles that include legacy systems and the enormous challenge of getting business, government, and regulators to collaborate and innovate. Bermuda has shown over the years that we are the right jurisdiction to overcome these challenges.
“The establishment of RICAP as an independent industry collective has confirmed that Bermuda continues to be forward-thinking and responsive to market needs. It has developed an approach to the business that will resonate with the entire market, especially younger professionals who understand how leveraging technology is going to be a vital element in the future success of our market and Bermuda as a jurisdiction.
“We are thrilled to be part of this efficiency-driven initiative that we believe will not only bring significant improvement to how risk is distributed and administered in the insurance value chain, but also bring new talent and skills to our industry for the years to come.”
Yan Leclerc, CAO, Third Point Re
RICAP, ChainThat, Partnership, Stakeholders, Digital Reinsurance, Insurance, Technology, Blockchain, David Edwards, Bermuda