B3i Codex1 Demo. InsureTech - Europe Chapter of the CPCU Society

Transcription

1 B3i Codex1 Demo InsureTech - Europe Chapter of the CPCU Society Enrico Alessandri, Systems & Processes Expert, Swiss Re P&C Business Management London, 16 February 2018

2 Blockchain Introduction 2

3 Blockchain in a nut shell Basic introduction (1) Distributed Ledger Cryptography keeping score of who owes what to whom unique combination of technology, consensus finding and security Smart Contracts (2) = + Cedent A is reinsured with Reinsurers B and C OLD WORLD each hold and repeat data in own ledger NEW WORLD shared, immutable data on a distributed ledger B and C should not see certain things of each other privacy, security and regulatory concerns public/private keys and consensus algorithms + decentralise and automate authorization and authentication Legal (contract) logic is put into computational logic labour intensive and manual processes self executing contracts (1) More info: (2) DLT: Distributed Ledger Technology; B3i uses Hyperledger 3

4 Blockchain and Smart Contracts Blockchain Who did What Smart Contracts Who did Audit logs operated across multiple organizations What How? When? Data Assurance Business logic operated and verified across multiple organizations Process Assurance 4

5 Business Implications to Re/insurance 5

6 Unlocked potential Across the Re/insurance Value Chain Efficiency potential Automation and digitisation Data standards Digital signoffs Reduced waiting times Reduced reconciliations Risk reduction Policy Holder Insurer Reinsurer Credit risk Retrocessionaire Cash flow inefficiencies Operational risk More info: Blockchain explained in layman insurance terms 6

7 How to unlock it Traditional ledger $ Shared ledger Automatic Validation $ Automatic Validation Automatic Validation Data Input Reporting Reporting Reporting Shared ledger Reporting Reporting Reconciliation Reconciliation Automatic Validation Automatic Validation Automatic Validation 7

8 Specifics of a Shared ledger Establishes single version of the truth Traditional ledger Shared ledger Shared ledger 8

9 B3i Making it Real 9

10 Wider Industry Benefits What distributed technology smart automation lower frictional costs reduced risk Traditional Insurance Platform Profit Cost Speed Distributed Ledger Insurance Platform Costs (expenses, capital) Profit Costs (expenses, capital) Expected loss Expected loss 2-8 weeks 4 24 hours Why more affordable insurance closer to risk pools new generation of customers Cost of alternative funding > Scalability Trust Cost of reinsurance = f (price adequacy, frictional costs ) 10

11 Blockchain Insurance Industry Initiative (B3i) A true industry collaboration Vision: manage and trade risks better Initiative launch: Swiss Re hosted the foundational meeting in October 2016 Membership: currently 15 members, with several new joiners upcoming Current Focus: P&C Property Cat XL Outlook: - Pipeline of use cases including commercial and primary insurance - Incorporation of permanent organisation 11

12 Outlook: B3i s product outlook We help the world trade risks more efficiently - starting with reinsurance Vision of the B3i is to develop an industry-wide open collaboration platform to facilitate frictionless trading of risks, starting with a global reinsurance contract management and clearing platform 2. Commercial Insurance As an industry, we need to stand together to drive the transformation 1. Reinsurance Contract Management 3. Market lubricant across value chain Better Market Intelligence Frictionless Risk Market Efficiency Game 12

13 Codex 1 Prototype Architectural Overview 13

14 Codex1 Internals ACORD Data Model Alignment 14

15 Handle Quote Set Up Admin structures Administration (ebot / ecot standards) Account Statement Claim Adjudication Business Level Ack ebot FinancialAccountType (various) FAItem Level Ack FAItem Level Rej Business Level Ack ecot ClaimAmountsIndicator (various) Business Level Ack ebot AccountTransactipnType (various) endorsement_notice cond_acceptance decline_endrosement_request Review Endorsement Recon cile Setup Financial Accounting Claims Accounting Endorsement request_endorsement signed_line_advice conditional_line decline_line_s Bind Contract (Firm Order) closing_signing_and_accounting Set Up Admin structures Order request_for_line_or_binder quotation quotation_request Quotation unconditional_line Build Submission DRI Submission Post-Placement (Placing standard) Placement (Placing standard) Pre-Placement decline_to_quote Reinsurer Cedent / Broker Codex1 Internals ACORD Process Compliance Financial Handling Coverage Full Partial None System Integration Path: High Level - ACORD Messaging / Low Level - Microservices 15

16 Swiss Re expects a range of benefits Working Capital Improvement Operational Efficiency and Risk Reduction Quality and Integrity of Data Foreign Exchange Management Faster and more efficient premium and claims settlement and optimised liquidity management Reduction of contract uncertainty, reconciliations and process inefficiencies Normalised and highquality data in a shared source with central control over integrity and easier auditing Accelerated FX transactions and consistent valuation Positive Impacts: Combined Ratio conservative estimate of -0.5% Improved liquidity Risk Reduction More info: 16

17 Distributed Ledger vs emessaging coverage The use case overlap Low B3i Today Distributed Ledger Tech smart Contract Placement / Post-Placement Automation Potential (% Efficiency) High emessaging B3i Administration Snd: load TRX DLT: reconcile TRX with smart contract / rules DLT: Release TRX / notify Rcv Rcv: Ack TRX (opt) Rcv: Reflect data on internal system (opt) emsg Administration Snd: load TRX Snd: notify Rcv Rcv: load TRX Rcv: reconcile against internal data / rules Rcv: apply TRX Rcv: send Ack Snd: release TRX Traditional Contract Administration Effort (# TRX) High 17

18 Codex1 Demo 18

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20 Legal notice 2017 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re. The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation. 20