B3i has announced the release of v1.0 of its Property Catastrophe Excess of Loss Reinsurance (XoL) product on the Corda Network. This builds on the creation of the first Corda 4.0 node on the global Corda Network on the 15th July 2019.
Sylvain De Crom, B3i Chief Product Officer said: “B3i is shipping its first application and this is our first opportunity to share with the wider market, not only the Cat XoL application, but also the wider infrastructure we have built to date. The importance of this release is fundamental in delivering to the insurance market the ability for seamless negotiation, efficient placement and contract certainty on a distributed platform that allows parties to retain ownership of their data. We are all very proud to be able to use this new technology, to help make insurance faster, cheaper and better for all our customers across the world.”
What is B3i Cat XoL Release 1.0?
Designed to make insurance faster, cheaper, and better, B3i has worked with the market to test and build its first product. The product improves the execution of the risk transfer process by reducing friction end to end across the value chain.
To do this it leverages Corda Distributed Ledger Technology (blockchain). The B3i application ensures only relevant parties have instant access to appropriate data with control of what information is disclosed to third parties. This removes contract uncertainty present in traditional, manually-driven processes.
B3i designed XoL for the insurance market, for:
- brokers advising and assisting clients
- insurance companies to manage risks
- reinsurers, by making capital more efficient.
Key features of B3i’s Cat XoL include:
- treaty creation and file sharing: this allows the broker and insurer to describe the treaty details and share relevant data files with one or all parties and enables interaction on the definition of the treaty
- contract certainty: a contract management module covers layer and section structure, reinstatements, premium and brokerage calculations as well as installments due and clauses
- real time distribution – of contract terms and conditions, offerings and signatures – means contract parties will have complete visibility and assurance they are working with the same (contract) version
- endorsement functions to allow multiple parties to agree upon amendments to existing contracts.
- interaction and dialogue: brokers and insurers can select one or more parties with whom to build a transaction and, throughout this process, all communication flows through the application using its built-in messaging (this makes keeps the dialogue in sync with that contract’s construction and execution).
During the negotiation process, contracts flow flexibly from one state to another including:
- Firm Order Terms (FOT)
- written and signed lines.
- a clear overview of all contracts and the state each contract is in.
A treaty overview screen provides a real time overview throughout the writing & signing stages. Users can monitor ‘at a glance’ the progress of treaty completion. This facilitates the management of multiple incoming as well as outgoing transactions allowing the party to transact.
B3i Cat XoL enables involved parties to interact, negotiate and place risk more securely and efficiently. As such the application can offer key benefits for its users, over those traditional processes:
- one example comes when participants can reduce the manual effort to place, renew and manage a CAT XoL treaty – by removing the need to replicate communication of the submission package to each participant in the treaty
- another involves improving contract certainty, with all parties sharing a common view of the state of the contract at all points in time: the old aphorism ‘first the deal, then the detail’ will disappear
- a third sees a reduction in operational risk, attributable to the elimination of double keying, (trans)coding and management of the information currently supporting the placement of CAT XoL treaties.
As all parties share one version of the truth, operational risks reduce. This benefits all market participants. Furthermore, larger companies can manage their intra-group reinsurance exposure across many different legal entities, including those spread across different countries. The platform can also manage:
- treaty reinsurance programs.
John Carolin, B3i CEO commented: “This is a pivotal moment for B3i, the team and its shareholders and this release is one we are proud to share. Looking ahead, the team are working with our customers in preparation for a live parallel run for year-end renewals whilst working towards subsequent releases and a production ready version in Q4 2019. B3i has laid the groundwork with this historic milestone, which paves the way as we continue to enhance the already rich functionality of our offering. In addition, B3i will be accelerating our partnership strategy to bring a broad array of solutions to customers.”
Enterprise Times: what does this mean
The Cat XoL product is, claims B3i, a ‘first of its kind’ proposition which provides a market wide, integrated network of (B3i V1.0) nodes (though see also Allianz and blockchain). Integrating brokers with insurers and reinsurers, provides participants with:
- a dedicated infrastructure for risk transfer execution
- data not only exchanges but is notarised and certified.
As important, B3i developed the Cat XoL application in a way which helps customers integrate it with existing legacy products. Not doing this would be a major impediment to long term take up – although how easy such integration, whether of systems and/or people, remains an open issue.