Major U.S. Commercial Carrier (Client Confidential)
Commercial insurance is an industry that, despite its criticality in the stability of the world economic system, remains highly manual, paper based and remarkably less digitized than most other industry segments, particularly within financial services.
With years of falling premiums and compressing margins, the industry is starting to look to blockchain as a potential way to move the industry to a digital paradigm. However, the whole industry has incurred significant technical debt - in a world where bordereau reports are still delivered to insurers in PDF format and must be hand retyped into claims systems, blockchain represents a north star that commercial insurance companies can point to in their digitization journey.
Our paying client is not unique in this regard. Kadena and its client are a year into a strategic partnership where we have been advising them on how to adopt blockchain, where to find the most impactful use cases and how to balance the opportunity of blockchain with the hard digitization work that is an enabler to deploy the technology.
We have worked with our client in a number of areas of pain today. For instance, commercial co-insurance is an area where the lack of digitization is a pain point for all the participants - brokers, co-insurers and the insured alike. In the London market this is particularly acute where over 75% of our client’s insurance claims payments due are paid later than the 60 days stipulated in the co-insurance contract.
We have also identified opportunities in re-insurance, where few insurers today have a robust modern system for managing their reinsurance deals, instead, relying on excel spreadsheets and phone calls for data management and transaction handling.
We are working with our client to modernize the commercial insurance market. We have been evaluating business cases, building proof of concepts and engaging in a dialog with the market. While other initiatives such as B3i have been approaching the market through large consortia, we believe that this is a slow and inevitably unworkable model as consortias rarely come to a successful outcome. Instead we believe in working with a small, but impactful, set of stakeholders to build a market solution.
In the co-insurance space, we see an opportunity to use Kadena’s blockchain to enable all syndicate members to have access to the same, up-to-date policy and claims data simultaneously and removing the need for re-entry.