Insureblocks is a dedicated weekly podcast on blockchain, smart contracts and distributed ledger technology (DLT) in the insurance industry. Hosted by Walid Al Saqqaf, this podcast will invite expert speakers from incumbents to the most promising start-ups in London, New York, Zurich and around the world. Insureblocks is the best way to not only understand the basics of blockchain but to also hear about proof of concepts, what insurance companies have done, their learnings and the end results. Whether you are new to or an expert on blockchain and would like to understand the impact it will have on the insurance industry, this is the podcast you'll want to tune into.
Ep.19 – Insurwave: the insurer’s perspective with MS Amlin and XL Catlin
Insurwave, the new marine insurance blockchain platform launched by EY, Guardtime, Microsoft, Willis Tower Watson, XL Catlin, MS Amlin and ACORD and piloted by Maersk has been a recurring theme here at Insureblocks.
In a previous episode, Insurwave - a Maersk pilot for marine blockchain insurance, we examined the client’s perspective. In a more recent episode, Insurwave: the complete story with EY, we discussed the process of creating Insurwave. To complete the circle, today we will look at Insurwave from an insurer’s perspective.
For today’s episode we were lucky enough to have two speakers, Madeline Bailey, Head of Strategic Initiatives at MS Amlin, and Hélène Stanway, Digital Leader at XL Catlin.
Blockchain in two minutes
Blockchain is a distributed ledger that allows users to share data in real time in a secure and immutable way. This data can be related to assets, for example the location of a vessel, or it can be a smart contract, a piece of code set to execute when a set of specified parameters is fulfilled.
Blockchain has the potential to create trust between parties in the insurance industry and improve risk intelligence, lowering costs and benefiting parties across the insurance value chain.
In the past four years the marine insurance industry has experienced declining performance and increasing combined operating ratios. It has become necessary, therefore, to take a strategic look at the industry and consider how new technologies can improve efficiency. In building Insurwave, both MS Amlin and XL Catlin were willing to take a leadership position in the insurance industry and commit to a vision of how the industry is going to develop.
In an industry not known for embracing change, developing Insurwave came with challenges. Working alongside competitors and completely re-inventing the underwriting process is not something insurance companies have done before. However, every participant was keen to grasp an opportunity to cooperate with representatives across the value chain and consider what each needs out of an insurance transaction to re-imagine the underwriting process.
The low margins plaguing the insurance industry posed an additional challenge. Unlike usual, well defined projects, it is harder to quantify the costs and benefits of investing in innovation. For that reason it was important to have a clear set of goals with Insurwave. One of the main factors Insurwave has been successful is its focus on providing hull and war cover for its pilot with Maersk.
Insurwave allows parties to seamlessly share data between them. By combining blockchain with IoT data, parties have access to real time information. At the moment Insurwave provides over thirty data points per vessel. The aim is to get to fifty. Insurers get more data, get data of different types and get it in real time.
Up until now, insurers traditionally looked backwards to quantify risk. This means the insurance industry has yet to come up with a definitive answer on how to use all this new data but Insurwave opens up a range of new possibilities.
Ep. 159 – AAIS’ OpenIDL joins the Linux Foundation
Joan Zerkovich – Senior Vice President, Operations at AAIS (American Association of Insurance Services) and Brian Behlendorf, Executive Director of Hyperledger at the Linux Foundation join us to announce that the AAIS' OpenIDL is joining the Linux Foundation. In this episode we get an introduction to the AAIS, OpenIDL, the Linux Foundation and Hyperledger. We also discussed how OpenIDL will leverage the Linux Foundation unique approach to governance.
What is blockchain?
Joan: distributed ledger technology is a technology that provides a way to have immutable records in the digital world, in a networked environment. Blockchain is used in a number of ways in addition to cryptocurrency, such as for business applications that require data security, privacy and an immutable record. OpenIDL uses blockchain to pursue a path of data security, privacy and transparency.
Brian: blockchain is a shared system of record amongst participants in a commercial ecosystem. Brian, compares blockchain to the mid and late 90s when a group of folks were talking about free software and working on projects with no justifiable economic basis behind them such as the Apache Software project and the Linux project.
Insurance have been conservative about adoption of new technologies, open source software and blockchain technology. However, Brian now thinks that insurers now see blockchain as solving some real problems, particularly problems created in understanding risk within a regulated environment.
Blockchain helps organise an industry to solve a collective problem. A shared system of record, with automation through smart contracts is an essential part of solving these problems and doing that in an auditable and verifiable and, and regulatable way.
AAIS is a US based advisory organisation. In the United States, insurance is regulated at the state level. That poses some issues when you’re trying to offer insurance products nationally. The National Association of Insurance Commissioners or representatives from all the states got together and they said we need an organisation that can help them collect data on the insurance market and provide some perspective at the national level. They can use that data to develop products that can be filed in all 50 states to provide a common foundation for insurance companies to add value on top of that with some consistency across all 50 states.
For the last 80 years AAIS has been authorised to collect data from the insurance carriers as an advisory organisation licenced in 50 states. AAIS is allowed to collect data that insurance companies wouldn’t be able to share between themselves due to antitrust concerns. AAIS uses that data to provide reports to the regulators and to develop products that they use.
Linux Foundation and Hyperledger
20 years the Linux ecosystem was composed of a number of open source contributors from RedHat, HP, IBM and thousands of other contributors. A consortium approach was set up as a home for the Linux project where the basic sustainability model was companies paying membership dues tiered by the size of the organisation. They weren’t pay for software development but paying for the coordination overhead, or as Brian calls it, the air traffic control function to all the different contributions coming in.
After a few years there was a sense that this model was stable, that it was reliable and replicatable.
Ep. 158 – Deep Dive on Plastic Bank’s Blockchain
Shaun Frankson is the CTO and co-founder of the Plastic Bank. In this podcast we discuss Plastic Bank’s model and perform a deep dive on Plastic Bank’s blockchain and token platform. This is a great example of how blockchain can be used for social good.
What is blockchain?
Blockchain is a secure digital ledger that provides a trusted way for peer to peer data exchanges in an encrypted manner.
The Plastic Bank
Plastic Bank transforms plastic waste into a form of currency to help create ethically sourced ecosystems where communities that collect this plastic receive an above market rate for it.
Plastic Bank uses blockchain technology to work with some of the poorest communities in the world to offer them a digital ID and a digital savings account to provide them with financial inclusion. Plastic Bank’s message is if you have to use plastic ensure that it is plastic that was stopped from entering the ocean and that is used to improve lives and regenerate communities.
Shaun explains that when you look at the 17 United Nations Sustainable Development Goals, the first one is poverty. Poverty is the focal point of many other issues including ocean plastic. Plastic Bank uncovered that about 80% of ocean plastics comes from developing countries with almost no waste management systems. They recognise that by creating a business solution where recycling can be an earned income for anyone not as an endpoint in life but as a starting point to a better life, a starting point to education, career training that can provide for all the things a family needs, then this can address both the plastic problem and the poverty problem.
When Shaun looked at bringing technology to bring financial inclusion to the poorest places in the world he came upon a number of problems: no phones, limited connectivity or data, and issues of illiteracy. They had to design a whole interface for first time illiterate person that’s never used a phone, without any reference to any technology and potentially lives somewhere with poor data connectivity.
Plastic Bank designed a system where when they open up a new branch they give the local team a first phone where they can create accounts for non-phone holders upon verifying their ID and age. This will automatically create for them a digital ID and a digital wallet for them to receive the cash earned from the plastic they collect. Like that they can earn their first phone through this system and provide them with full access over their account.
Hitting the 1 billion plastic bottles milestone
The Plastic Bank measured that it takes 50 bottles to reach 1 kilo of plastic. 1 billion plastic bottles resulted in 20 million kilogrammes of plastic waste that was prevented from entering the oceans.
It took them 4 years to reach 500 million collected plastic bottles, this year to reach the next 500 million and in the next 12 months they expect to recycle well over another billion bottles worth of plastic.
The Plastic Bank has a target, that by 2025, they will be becoming a billion dollar company, impacting a billion lives and preventing a billion kilos of plastic from entering the ocean every year.
Plastic Bank’s Blockchain
Need for a digital reward programme where we can ensure that the right people get the right amount of reward. For example, how to ensure in a country like Haiti that you put millions of dollars into the country and ensure it goes to the right people in a safe manner.
Ep. 157 – SLAFKA – Safeguarding Nuclear Material with Blockchain
Cindy Vestergaard is the Stimson Centre Director, Nuclear Safeguards Program & Director, Blockchain in Practice program. In this podcast we discuss the interesting work she does in safeguarding nuclear material with blockchain technology.
What is blockchain?
Blockchain is a subset of DLT, which is essentially a combination of a variety of different technologies that have been around for already a number of decades, such as peer to peer protocols, cryptography hashing, to make it an immutable ledger that can be shared securely, digitally, across the ecosystem.
The Stimson Centre
The Stimson Centre is a think tank that was set up in 1989 by Barry Blechman & Michael Krepon at a time when the Cold War was ending shortly before the fall of the Berlin Wall. It’s a nonpartisan and independent centre that looks at real world problems.
The work that Cindy’s team does is evidence-based policy research that sits at the intersection of technology and policy.
In 2019 a partnership was established between the Finnish Radiation and Nuclear Safety Authority (STUK), the Stimson Centre in Washington, D.C., and the University of New South Wales (UNSW) in Sydney, Australia, to develop the world’s first distributed ledger technology (DLT) prototype for safeguarding nuclear material, called SLAFKA.
Finland is the first country in the world to be building a deep geological repository for its spent nuclear fuel. STUK, its radiation and nuclear safety authority approached the Stimson Centre for helping them develop a prototype.
The question for STUK and for the government of Finland needed to answer is how to ensure that the material underground is also the same that is reflected on the books above ground. Data integrity is very important. The other reason is concerning their relationship with Euratom, the regional safeguards body for the EU’s member states that ensures a regular and equitable supply of nuclear fuels to EU users. The objective is in increasing security, enhancing data sharing and transparency between STUK and Euratom.
For the Stimson Centre, the opportunity, was to see if DLT can actually handle the different types of transactions that are needed under a nuclear safeguards agreement.
Data transactions and trust amongst parties
From a data transaction perspective; nuclear material moves within a facility, within a country and internationally. As it moves it also shifts in form for example from yellowcake or uranium ore concentrates to enriched uranium. All these movements and change of state have to be logged and reported to either a national regulator or a regional regulator such as Euratom within the EU and then to the International Atomic Energy Agency (IAEA) in Vienna.
Today’s data transactions come in all shape and form both in terms of paper and in an electronic format. The IAEA has a portal for safeguards declarations but it isn’t universally used. Some countries still provide their declaration on a USB stick whilst others on paper.
In the nuclear world there isn’t a lot of trust among different parties. The IAEA goes in to monitor and verify that what states are doing is actually meeting their obligations in using nuclear material for peaceful purposes.
One of the reasons why the IAEA hasn’t launched a bloc...
Ep. 156 – Rebalance Earth – Blockchain & Climate Change
Walid Al Saqqaf, Founder of Insureblocks and CEO & Co-Founder of Rebalance Earth joins us in this podcast to discuss the role blockchain has in fighting climate change but also the impact it can have in regenerating biodiversity. In a world that is increasingly threatened by the challenges of climate change, ecosystem destruction, and the 6th mass extinction, carbon credits and carbon offsetting markets seem ill equipped to face them. The markets are plagued by a lack of transparency and a number middlemen here to make a quick buck, can blockchain, AI and Internet of Things along with keystone species like African Forest Elephants provide an answer?
What is blockchain?
Bruce Pon, co-founder of Ocean Protocol, mentioned blockchain as this “general purpose technology” like the steam engine during the industrial revolution. Now everyone will tell you that blockchain is a distributed database that removes the need for intermediaries and that has immutable or tamper proof properties.
From the perspective of Rebalance Earth, Walid looks at blockchain from two perspectives, a short term and a long term one:
On a short term it is a technology that allows for the transparent, traceable and trusted transfer of value, from firms and households wishing to rebalance themselves, to local communities that are here to safeguard keystone species like African Forest Elephants who perform the carbon offsetting services and the maintenance of whole biodiverse ecosystems. All this in a transparent manner to avoid corruption and double counting.
From a long term perspective, we all know today that biodiversity is important. However we don’t have enough data to understand how important it is, and crucially how much it’s worth. To get the necessary amount of data to begin to understand biodiversity you need a very large number of actors around the world to share their data. This is where blockchain can come in, in the creation of a data marketplace that will facilitate the share of data to unlock the value of biodiversity
Co-founded by startup founder, Walid Al Saqqaf, Assistant Director at the IMF, Ralph Chami, world renown conservationist Ian Redmond, along with 60 volunteers, Rebalance Earth is a purpose driven company whose aim is to re-imagine carbon offsetting as a mechanism to fund the protection of keystone species to promote and regenerate biodiversity. Other ecosystem services attributable to these species will follow as research reveals the value of their role in the ecosystem.
Biodiversity is the variety of life on earth in all its form and all its interactions.
A keystone specie is an organism that helps to define an entire ecosystem. It is one which has a disproportionately large effect on its natural environment relative to its population size. If that species dies an entire ecosystem risks collapsing. Equally if a keystone specie is reintroduced into an ecosystem it can reflourish. This is the case of what happened in the Yellowstone National Park when 31 wolves were reintrod...
Ep. 155 – Digital Euro – Insights from ABI
Silvia Attanasio, is the Head of Innovation at ABI (Italian Banking Association). Previously to that role she worked for 17 years at ABI Labs, the centre of research and innovation at ABI. Previously Silvia introduced us to Spunta, the private permissioned DLT project for interbank reconciliation. In this podcast she shares with us some of the work that ABI and its consortium of Italian Banks are looking to offer to the European Central Bank in its development of its CBDC called the Digital Euro.
What is blockchain?
Blockchain is a disruptive technology that can deeply transform the way we transact. It may add transparency and eliminate frictions in transactions. Blockchain is not a cost cutting technology. It is a technology that can bring some efficiency gains in due course. Blockchain technology can transform processes
Update on Spunta
Silvia featured on Insureblocks on the 22nd March 2020 where she introduced Spunta, a private permissioned DLT project for interbank reconciliation.
The new application streamlines and automates the reconciliation of transactions, improving governance of the overall Spunta process, a nostro vostro account, and moves from a slow error prone settlement system to a real time management of the reconciliation process.
Today after three waves of migration, nearly 100 banks are in production operating the Spunta DLT daily. Each bank has its own DLT node, geographically distributed in nine different cities across the country processing 322 million transactions.
Introduction to Central Bank Digital Currency (CBDC)
The term CBDC denotes money that a central bank could create in digital form and make available to the general public. It would not be another currency, it will be another form of the existing currency.
In January 2021, The Bank of International Settlement ran an updated survey with central banks around world. In it they found that 86% of central banks are engaged in CBDC work. P from 80% in May 2020. Central banks representing 1/5 of the world’s population are likely to issue a retail CBDC in the next three years.
The goal of improving financial inclusion is much more pronounced in emerging economies, while it is less present in advanced economies like European Union, where the main objectives are the security and efficiency of the payment system.
The Digital Euro
The European Central Bank’s CBDC is called the Digital Euro. The ECV see’s three main benefits in exploring the possibility of launching a Digital Euro:
* Support digitisation for a native digital European economy
* Respond to the declining usage of cash as a means of payment.
* Tackling sovereignty concerns related to foreign private digital means of payments in the euro area or possible future foreign CBDC
There are a few more benefits from the bank’s perspective that Silvia highlighted such as the possibility of enabling use cases based on the programmability of the currency, and the possible application to transactions from counterparties as a machine.
Preserving properties of cash, anonymity and privacy in a Digital Euro
Fabio Panetta, Member of the Executive Board of the ECB stated that in a a href="https://www.ecb.europa.eu/press/blog/date/2021/html/ecb.blog210325~e22188c522.en.
This is the best blockchain based podcast out there. If you are looking for relevant information as an investor, a business owner, or as a technologist, there is no better source of intelligence.
Walid does a superb job at not only getting great guests on the show, but also probing each of them with relevant, thoughtful, knowledge driven questions. Cherry on top is that Walid takes the time to type out detailed summaries for each and every show. So if you are looking for something specific you can also find it easily in all of his material.
Great job Walid! Love it!
I am an insurtech leader and entrepreneur and your insights in smart contracts resonated very well with what I do. Keep up the good work.
I am a young, male, about to begin a career in the P&C business as an underwriter, hoping to move into a brokerage role after some years of experience Underwriting.
Please keep up the hard work for young people like myself, to educate themself in Insurance.