Reinsurers plan to establish joint blockchain platform
PartnerChina Re, Hannover Re, General Reinsurance Corporation
In View Summary
China Re, Hannover Re, General Reinsurance Corporation and Zhong An have announced plans to create a joint reinsurance blockchain platform to mitigate the problems faced by insurers and reinsurers.
For example, although insurers have access to complete information, reinsurers have very limited data about transactions. Another example relates to the limited transactional data available to reinsurers which results in operational risk and leads to lack of confidence, which results in reinsurers charging insurance companies highly.
The platform is under the supervision of the Shanghai bureau of the China Insurance and Banking Regulatory Commission. Covering negotiation and contracting, reinsurance, document exchange, claims processing, and integration into a multi-chain trading ecosystem.
Reinsurance network participants
Representatives from ZhongAn, Hannover Re and the General Insurance Corporation have issued a joint statement on this collaboration: “We believe this blockchain solution will help foster the application of the technology and will promote the overall progress of domestic blockchain technology. It will also help realise business connectivity, data exchange and technology value transfer based on blockchain, further enhance business value, share the dividends brought by technological innovation, promote the innovation and upgrading of the insurance industry.”
Benefits to Customers:
Transparency and privacy
Benefits to the Insurer:
Single version of information
Less auditing pains
Improved claims processing and settlements
Reduced operational costs
The Digital Insurer's View
There are several blockchain based reinsurance initiatives underway, but they are still in their infancy, and concrete use cases have yet to emerge. According to a PwC report, blockchain offers $5-10bn cost-savings opportunity to the reinsurance sector. Blockchain promises cost savings with faster, more efficient and accurate placements-cum-settlements. This collaboration from China Re, Hannover Re, General Reinsurance Corporation and Zhong An PoC not demonstrates the potential for tradition re-insurers such as Hannover Re and internet players such as Zhong An to collectively open up a new reality for reinsurers.