A few days ago we looked at a simple analogy to understand what the blockchain is. Interestingly on the same day, a small PR piece was published outlining a pilot of the use of the blockchain to facilitate transaction processing and settlement of cat bonds between two Bermuda based companies.
Blockchain Technology Successfully Piloted by Allianz Risk Transfer and Nephila for Catastrophe Swap
Blockchain-based smart contract technology has the potential to facilitate and accelerate the contract management process of such cat swaps and bonds. Each validated contract on the open shared infrastructure contains data and self-executable codes inherent to that contract. When a triggering event occurs which meets the agreed conditions, the blockchain smart contract picks up the predefined data sources of all participants, and then automatically activates and determines payouts to or from contract parties.
It will be interesting to see what other uses arise for blockchain and whether Bermuda can make its mark in InsurTech and RegTech. Sadly though, Bermuda doesn’t feature in Deloitte’s report on RegTech or KPMG’s report on Fintech which highlights Insurtech. Bermuda would seem to be well positioned to host InsurTech and RegTech startups given its dominant position for offshore reinsurance. Aside from Trunomi, where are they?