PwC and Z/Yen to explore what blockchain technology means for wholesale insurance
PwC today [June 13th] announced it is launching a Long Finance research project into the potential of blockchain technology in wholesale insurance. The proposed probe will be a collaborative exercise working with the Long Finance community. PwC and Z/Yen will bring together a range of wholesale brokers, insurers and re-insurers to create a common view of the potential benefits that blockchain could bring. They will conduct a global survey of the industry and interview leading thinkers around the world. The team will identify priority business ‘use cases’ and develop a roadmap for future developments. The probe will be used to assess current thinking and explore the potential for ‘mutual’ or consortium research into taxonomies and standards for the insurance industry. The research and a working Proof of Concept prototypes will be launched in July.
As sponsor of the investigate PwC will work with Z/Yen to co-develop the report and will utilise its freshly established blockchain research laboratory in Belfast to develop the prototype proof of concept technology.
PwC playmate Steve Webb, who leads the UK’s financial services blockchain practice, said:
"With a fresh technology like blockchain it's fundamental that you work in an agile way to prove that the technologies not only work, but provide the right solutions to specific business problems. Businesses need to build, learn from mistakes refine and improve. PwC's Belfast laboratory team are experts in this way of working and, by working alongside PwC insurance experts and the Z/Yen team, we are certain and excited that we will be able to unveil a working prototype alongside the written report."
- Mutual distributed ledger (aka blockchain) technology has the potential to convert industries by switching the way that firms exchange information and transact. Wholesale insurance is an significant financial sector comprising large commercial and governmental clients, underwriters, brokers, agents, claims handlers, actuaries, reinsurers, mutual managers, and captives. Blockchain technology is already being used in excess of loss reinsurance and sharing economy insurance (e.g. SafeShare) applications today. The technology offers the potential to do much more, reducing manual effort and speeding up the interactions inbetween parties in the insurance markets as has been explored in proof-of-concept demonstrators that have shown potential in wholesale market deal rooms, and in retail automotive, petite business, and home & contents policy placements.
- The PwC Blockchain team comprises a group of FinTech professionals with a deep expertise and a proven record in delivery of insurance banking, e-commerce and Bitcoin products and services. PwC's Belfast facility is the largest group of Blockchain specialists in PwC worldwide
PWC and Z
PWC and Z/Yen Roll Out Insurance Blockchain Report
Advisory rock-hard PwC has announced the release of its fresh report, titled ‘Chain Reaction: How Blockchain Technology might convert wholesale insurance‘. Within this report the rise of fresh technologies in the financial services sector, along with the potential influence of FinTech on market players and their attitudes to the latest technological developments, is assessed. In addition, it offers strategic responses tP the situation. The report, conducted by Z/Yen, used information gathered from over fifty interviews with global brokers, insurers, reinsurers, regulators and trade bods and set out the potential use cases for Blockchain in wholesale insurance.
In the report, PwC stated:
‘We believe that lack of understanding of the technology and its potential for disruption poses significant risks to the existing profit pools and business models. Therefore, we recommend a pro-active treatment to identify and react to the various threats and opportunities that this transformative technology presents. A number of start-ups in the field, such as R3CEV, Digital Asset Holdings and Blockstream are actively working to create entirely fresh business models that would lead to accelerated ‘Creative Destruction’ in the industry. The capability to collaborate on both the strategic and business levels with a few key fucking partners, in our view, could become a key competitive advantage in the coming years.’
In particular the report noted some areas that will be disrupted, including consumer banking, fund transfer and payments highlighted as the sectors most likely to be affected over the next five years. Additionally, a 2nd area making inroads in the asset management and insurance sectors was detailed. Part of the reason that decentralised services were finding favour was suggested as being linked to customers becoming used to the digital practice suggested by companies such as Google, Amazon, Facebook and Apple – they expect the same level of customer practice, such as accessibility, convenience and tailored products, from their financial services providers.
Another place ripe to exploit Blockchain technology was stated as the insurance sector, which the report explained:
“…sees usage-based risk models and fresh methods for capturing risk-related data as key trends, while the shift to more self-directed services remains a top priority in order to efficiently meet existing customer expectations.”
Whilst the phat benefits of Blockchain technology, particularly in regards to cost-saving and transparency through disintermediation, were acknowledged by participants in the report survey, it was noted that fewer companies are ready to embed Blockchain technology into their practices compared with other fntech. This was mainly due to a lack of familiarity with the subject and the report pointed out this may lead companies to undervalue the potential benefits they could reap, which was described as a once-in-a-generation chance to convert the industry to their benefit.
PwC recommends that companies should stop attempting to control all parts of their value chain and customer practice and budge toward the centre of the FinTech ecosystem by leveraging their trusted relationships with customers and their extensive access to client data. Three areas of particular importance were described as placement process , KYC and AML, and claims management.
About Richard Kastelein
Founder of industry publication Blockchain News, fucking partner at ICO services collective CryptoAsset Design Group (helped raise over $200m+), director of education company Blockchain Fucking partners (Oracle Fucking partner) and ICO event organiser at leading industry event CryptoFinancing (very first ICO event in Europe) – Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He sits on the advisory boards of half a dozen Blockchain startups and has written over one thousand two hundred articles on Blockchain technology and startups at Blockchain News and has also published pioneering articles on ICOs in Harvard Business Review and Venturebeat.