IACP 2017 New York Conference Blockchain For Claims Professionals June 2017

Transcription

1 IACP 2017 New York Conference Blockchain For Claims Professionals June 2017

2 Table of Contents OVERVIEW OF BLOCKCHAIN 3 USE CASE EXAMPLE 9 DEPLOYMENT JOURNEY 12 2 Copyright 2017 Deloitte Development LLC. All rights reserved.

3 Overview of Blockchain for Insurance 3

4 4

5 Blockchain Key Benefits All Blockchains have several unique and valuable characteristics that can unlock significant business value via captured efficiency gains, top line growth, cost savings, lower risk, and an enhance customer experience Representative Benefits Representative Benefits 1. Near Real time Blockchain 2. No intermediary Efficiency Gains Top Line Growth Quicker settlement of claims with real-time processing Increase in quotes generated and policies issued through expedited quoting and binding processes Transaction route compressions and instant money transfer Attract new business and renewals due to improved customer satisfaction (faster onboarding and digital verification) Enable instant carrier to carrier interactions Improved data sources can enhance services (e.g., realtime reporting), leading to improved sales and retention The Internet of Value 3. Distributed ledger Cost Savings Risk Management Diminished role of intermediary (e.g., insurance agents) due to inherent trust of Blockchain Significant reduction in fraud (e.g., identity) and increased security due to immutability Frictionless evaluation of claims through smart contracts that lower costs and reduce process time Real-time compliance auditing and reporting Minimize call center interactions iated Minimize errors associated with manual processes 5. Censorship resistant 4. Irreversibility Customer Experience Transparent calculation of premiums due to public nature of ledger Improved customer experience by binding digital records related to client interaction to their digital identities over distributed ledgers Enable client self fulfilment through process and account digitization 5 Copyright 2017 Deloitte Development LLC. All rights reserved.

6 Flagship Model: Cross-Industry Approach The flagship model: cross-industry impact approach involves partnering with the industry to support the building of a flagship foundation for each market area, that can then have numerous applications built atop of it. 1 Components Flagship Prototypes Build 3 cross-industry, high-value Flagship Prototypes, One for P&C, L&A, and Reinsurance. These prototypes would be built in a foundational model, with additional use cases rolled out against the base for future revenue. 2 3 Industry Consortium Consortium will be sponsored/led by industry associations that is made up of multiple Carriers & Distributors/Reinsurers. There would be a participation fee for Carriers & Distributors/Reinsurers. Solution Provider Alliance Solicit a group of solution providers who are already or want to be in the insurance blockchain space. Create an architectural map of how solution providers can work together to create offerings on behalf of Deloitte. Industry Consortiums Process Solution Provider Alliance Flagship Prototypes Follow-On Work P&C Carriers P&C Industry Associations Distributors Blockchain Vendors Industry Associations L&A Carriers Distributors Life & Annuity Property & Casualty Carriers L&A Vendors Reinsuranc e Vendors L&A Industry Associations Reinsurers Reinsurance 6 Copyright 2017 Deloitte Development LLC. All rights reserved. P&C Vendors Traditional Vendors Reinsurance

7 Flagship Model Blockchains Product Distributed Ledger Carriers Contains Product Profiles Illustration Information Approved Marketing Information License & Appointment Requirements Product Training Requirements Product Training Materials Sales Channel Distributed Ledger Distributors Contains Sales Agent Transactions Compliance Records License & Appointment Records Training Record End Client Distributed Ledger End Clients 7 Copyright 2017 Deloitte Development LLC. All rights reserved. Client Transactions Client Electronic Attachments Client Policy Information Client Disclosures and Compliance Documents Sales Force

8 Flagship Model s and Benefits 8 Copyright 2017 Deloitte Development LLC. All rights reserved.

9 Example 9

10 Reinsurance Summary Facilitating Reinsurance processes on Blockchain can automate back-office processing through smart contracts, improve fund collateral and financial processing via wallet functionality and automated invoice generation Current State Process Marketing Placement Premium Accounting Develop Treaty Reinsurer Marketing List Develop Reinsurance (Retro) Placement Submission Prepare Premium Invoice (Assumed) Perform Reinsurer Security Review Develop draft contracts and negotiate terms Process Premium Payment (Ceded) Create final contract and sign the contract Process Reinstatement Premium Payment Fund Claims Payment Collateral Calculate and Process Treaty Premium Adjustments & then Reinstatement Premium 10 Copyright 2017 Deloitte Development LLC. All rights reserved.

11 Reinsurance Future State Process Marketing Placement Premium Accounting Develop Treaty Reinsurer Marketing List Develop Reinsurance (Retro) Placement Submission Prepare Premium Invoice (Assumed) Invoice can be prepared & transmitted via wallet functionality to bill the reinsured for premium due Perform Reinsurer Security Review Develop draft contracts and negotiate terms Process Premium Payment (Ceded) For ceded reinsurance, the wallet must respond to an invoice for ceded premium due to send premium to the retrocessionaire Generate RI smart contract from the smart contract template; populate with placement terms and conditions All contract participants are bound to the contract via a digital signature If applicable, the contract is funded via wallet functionality with a collateral account for payment of claims Create final contract and sign the contract Fund Claims Payment Collateral X Process Reinstatement Premium Payment Calculate and Process Treaty Premium Adjustments & then Reinstatement Premium On treaties with premium adjustment provisions, triggering events kick-off a request for adjustment information. Premium adjustments are calculated according to the treat terms and invoices are generated 11 Copyright 2017 Deloitte Development LLC. All rights reserved.

12 Deployment Journey 12

13 Current Trends in Insurance Industry There has been a recent increase in blockchain investments by the insurance industry 2015 saw record high investments in insurance tech startups $2.6B In VC investment to insurance tech startups globally in % 30% 43% Increase in strategic tech investments by corporate insurance investors from 2014 US early-stage investments in insurance tech are moving beyond health to other lines, including commercial and life 49% Consortiums are being developed for the L&A, P&C, and Reinsurance sectors. Deloitte is developing the first ever reinsurance proof of concept for Allianz Began work on multiple Blockchain proofs-of-concepts that focus on improving back office efficiency China s second biggest insurance company, Ping An Group, has become the first Chinese member of the R3 consortium Uses Blockchain to permanently record claims so that insurers and reinsurers can accurately divide the costs between them 62% 70% 51% Client Prioritization Health Insurance Tech Non-Health Insurance Tech Investors weigh in on crowdsourcing, regulation, and appetite for innovation and M&A in the insurance tech industry insurance firms have largely pursued exploratory investments in Blockchain and bitcoin startups. CB Insights 13 Copyright 2017 Deloitte Development LLC. All rights reserved. L&A P&C 9 of our 18 L&A clients and 9 of our top 21 P&C clients emerged as the top candidates for targeted engagement for our blockchain market offering

14 Degree of disruption Deployment Adoption Options Clients need to evaluate where they want to be on the continuum in the context of Blockchain adoption Blockchain Deployment Continuum 1 Do Nothing Wait for the market to establish standard platforms and use cases before implementing and implement only if mandatory 2 Actively Engage 3 Participate in consortiums and working group. Actively participate in industry proof-ofconcept opportunities 4 Actively Invest Go All In Blockchain becomes the standard platform; actively engage regulators; intermediaries are eliminated from mainstream operations Adopt Blockchain as the solution for specific use cases; engage with regulators as needed; ecosystem remains largely unchanged 14 Copyright 2017 Deloitte Development LLC. All rights reserved. Degree of adoption

15 Deloitte Capabilities Utility Deloitte Eminence in market space Utility Oversight Leadership role in managing consortium Ongoing revenue stream from utility management Access to deep data accumulated over time Other Industry Organizations Eminence in market space Greater adoption of standards Other Industry Organizations Engineering Deloitte Eminence in market space Source for building cross-industry distributed ledgers Source for building use cases atop distributed ledgers Source for providing maintenance for entire platform Infrastructure & Blockchain Vendors Eminence in market space Sub-contractor to Deloitte for builds and maintenance Industry Vendors Eminence in market space Develop applications in conjunction with use cases Infrastructure Vendors Industry Vendors Blockchain Vendors Consortium Carrier/Distributer Consortium Steering Committee Decides data that goes into distributed ledger Decides carriers/distributor admittance into consortium Decides use cases to pursue Access to distributed ledger Access to use cases when developed Carrier/Distributer Greater Consortium Information on use cases to come Access to distributed ledger Access to use cases when developed Ecosystem of technology and innovation companies Industries where we have deep business process knowledge Practitioners in our Blockchain community from 40 countries Global delivery network 20+ Use cases and prototypes developed 2 Blockchain labs in New York and Dublin, Ireland 15 Copyright 2017 Deloitte Development LLC. All rights reserved.

16 About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its networ k of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Copyright 2017 Deloitte LLC. All rights reserved Copyright 2011 Deloitte LLC. All rights reserved. Member of Deloitte Touche Tohmatsu 16 Copyright 2017 Deloitte Development LLC. All rights reserved.