The Reinsurance Solutions business of Aon, and Guy Carpenter have partnered with the Institutes RiskStream Collaborative (RiskStream) to streamline the reinsurance placement process using blockchain.
The collaboration will leverage the advancements in blockchain and distributed ledger technology (DLT) technology to harmonize digital reinsurance transactions.
The project, through industry standard capabilities is expected to streamline the flow and verification of data and reduce frictional costs across the industry.
Aon reinsurance solutions business chief information officer Bob Olson said: “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.”
Aon, Guy Carpenter and RiskStream along with other industry partners such as RenaissanceRe and Everest Re have already tested a proof of concept to digitally distribute submissions and receive quotes using distributed ledger technology.
The project was developed on RiskStream Collaborative’s Canopy framework and made extensive use of ACORD data standards. It is now moving into the next phase of development with invitations to member carriers, brokers and reinsurers to contribute.
The next phase is intended at digitizing reinsurance placement process with a goal of streamlining interactions within the reinsurance marketplace by creating secure digital methods and processes for cedants, brokers and reinsurers to manage treaties.
Guy Carpenter chief information officer John Crichton said: “This project is an important first step in the path to improving transactional efficiency and creating value for our clients through blockchain.
“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.”
The Institutes RiskStream Collaborative president Christopher McDaniel said: “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.”