The Next Stage
Captives are experimenting with blockchain applications and see promise in handling claims.
- Meg Green
- August 2019
Interviews from the Captive Insurance Companies Association's International Conference in Tucson, Arizona and Bermuda Captive Conference held in Southampton, Bermuda. Following are excerpts from AMBestTV coverage of the events. Interviews by Meg Green.
Blockchain is here to stay as a technology, according to Steve McElhiney, president, EWI Re, Inc. He was part of a panel that discussed the new technology's implications for captives, at the Captive Insurance Companies Association's International Conference in Tucson, Arizona. Joining him were Barbara Ingraham, managing director, excess & surplus, Verisk and Marcus Schmalbach, CEO of Ryskex.
How does blockchain work within a captive?
McElhiney: One example I like to point to is when you look at the whole issue around food safety and more so what's called food provenance and guaranteeing where food's coming from. The supply chain community is moving very aggressively in that regard. For insurance, it would be a way to much better analyze where contamination could be arising, who's responsible for that, and to put better risk management around that. I think that, to me, sings out as one of the key examples of where blockchain would be immediately embraced. The supply chain community's moving very aggressively with new technologies in that regard.
What obstacles do captives face when it comes to using blockchain?
Ingraham: Some of the biggest challenges that you have with blockchain have to do with the fact that the technology is still relatively young. With young technology, then the business models are not necessarily established yet.
The uses of blockchain are still being understood. The actual insurance use cases, there's a lot of experimentation going on, but nobody has actually settled on anything like the killer app for blockchain for insurance yet. Those are some of the challenges that you have.
How do you see blockchain expanding in captives?
Schmalbach: There are some piloting cases around, especially alongside the supply chain. This will definitely be the driver for the next years. Especially when we look at the claim adjustments. Blockchain has its benefit in parametric solutions areas. From our point of view, what we are doing on piloting cases around Europe with captives is looking for the whole value chain and where perhaps the technology can help creating something brand new or driving a new solution for the captive itself, not just as a technology, but also driving the possibility of handling emerging risk throughout parametric solutions. The corporate and the captives are interested in that topic. This will bring a better understanding to the whole industry.