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B3i, the consortium working to develop digital ledger technology for the insurance and reinsurance industry, has become a private enterprise and is re-evaluating its technology
B3i has incorporated as a limited company, B3i Services AG in Zurich, Switzerland, said Paul Meeusen, head of distributed ledger technology at Swiss Re Ltd. in Zurich.
The 15 founding members of the consortium are stockholders, and the company will begin an investment process in April with “a large number of parties which have expressed interest,” Mr. Meeusen said.
B3i is also reassessing its technology, according to Mr. Meeusen.
“We have worked with Hyperledger so far — our product was built to prototype on Hyperledger,” which he said was a “good learning experience.” Hyperledger Fabric is a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation
“But we’ve also had some lessons learned in terms of, in particular, scalability and privacy in the handling of data,” Mr. Meeusen said. “Those are two criteria for which we are taking a closer look at technology and potential alternatives.”
Alternatives include ethereum, one of the public blockchains supporting a cryptocurrency, as well as banking consortium R3CEV L.L.C.’s Corda technology.
“We have some members with experience with ethereum, and we are also looking at R3’s Corda,” Mr. Meeusen said.
R3 was founded by banks but has expanded to include the Bank of Canada, the Monetary Authority of Singapore and the Hong Kong Monetary Authority, he said. Reinsurance brokerage TigerRisk Partners L.L.C. is also working with the consortium, which is building its own distributed ledger technology, Corda, which is not a blockchain, and plans to launch the first enterprise-grade version of the product in the first quarter of 2018.
“As the largest consortium in the enterprise blockchain space, we’re in continuous dialogue with a very wide and diverse range of businesses, regulators and other consortia,” Charley Cooper, a director with R3 in New York, said in an email.
B3i and R3 are just two of the groups that have formed to develop and commercialize digital ledger technology.
Another player in the space, The Institutes RiskBlock Alliance, the digital ledger technology consortium started by The Institutes, the insurance industry education and research organization in Malvern, Pennsylvania, is also in contact with fellow organizations.
“We’ve been in communication with a number of consortia. That’s been our approach from day one,” said Patrick Schmid, vice president of RiskBlock. “For example, we were founding members of the Enterprise Ethereum Alliance in early 2017.”
“We’ve also engaged with R3 and Hyperledger about their technology (Corda and Fabric, respectively) and ways to work together,” Mr. Schmid added. “We’ve been in discussions with B3i, a European alliance, about opportunities to collaborate. We’ve also been in discussions with Blockchain in Transportation Alliance, Wallstreet Blockchain Alliance and New Mobility Labs about ways to work together.”
The nature of the conversations with blockchain or DLT platform providers are generally exploratory, Mr. Schmid said. “Our long-term goal is to bring the industry together via the consortia and provide an interoperable framework for the industry to use and build off of. Part of that means properly understanding and vetting existing platforms, like Corda or Hyperledger.”
Unlike B3i, which is moving to become a business, and R3, which also has equity members, RiskBlock is not looking to go private.
“With blockchain and DLT, you need a network to take full advantage of the underlying features,” Mr. Schmid said. “We feel not-for-profits like The Institutes, with a long track record of serving the industry, are best positioned to bring the industry together and build that network,”
As part of its transition, B3i will also be further strengthening and building its team, to be based largely in Germany and Switzerland, while also planning to open offices in the U.S and Asia, Mr. Meeusen said.
The consortium plans to become more active in the U.S. both from a marketing point of view and in terms of its interaction with regulators on a State and Federal level.
“We are interested in starting a dialogue with state insurance regulators so we understand their concerns as we move from a paper to a digital world,” Mr. Meeusen said.
U.K.-based the Lloyd's Market Association said that blockchain and Internet-of-things technology are likely to transform the marine and transport insurance and reinsurance sectors in terms of the risks they underwrite and how they do it, Hellenic Shipping News Worldwide reported. The blockchain platform could be used to link shippers, freight forwarders, financial institutions, ports and customs authorities to share insurance certificates, the association added.