Personal Lines Pricing & Analytics Seminar 2018 · Personal Lines . Pricing & Analytics . Seminar...

Personal Lines Pricing & Analytics Seminar 2018 Tuesday 22 May 2018

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Some insights into the fast moving world of blockchain in insurance Nelson Henwood

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Copyright© Finity Consulting Pty Ltd

Presentation Outline

What is blockchain?

Public vs Private

blockchains

Some interesting use cases in Australian financial services

Blockchain in Insurance –

potential use cases and examples

Some other interesting

projects

Final thoughts

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What is blockchain?

A distributed ledger of transactions

Satoshi’s Bitcoin

The blocks in the chain

Blockchain transactions

Key features

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A blockchain transaction

Source: G2Crowd sli.do #Pricing2018


Who is Satoshi?

Satoshi Satoshi #2 #1

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A few other concepts

•Maps data of arbitrary size to a string of fixed size •Designed to be a one-way function

Cryptographic Hash Function

•A hash of this creates a transaction address •Verifies transaction was created with your private key without revealing it Public Key

•Used to sign transactions broadcast to the blockchain •If revealed, anyone can pretend they are you – and steal your crypto Private Key

•Means for new crypto currency / token venture to raise funds •China and US regulation

Initial Coin Offering (ICO)

•Self executing contract based on computer code •The code resides on the blockchain and enables logic to be applied to a transaction Smart Contract

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When is blockchain valuable?

Multiple parties share

data

Multiple parties update

data

Requirement for verification

Intermediaries add cost or complexity

Interactions are time sensitive

Transaction interaction

Source: https://www.pwc.com/gx/en/industries/financial-services/publications/blockchain-technology-might-transform-wholesale-insurance.html

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Public blockchain

Source: https://www.pwc.com.au/publications/pwc-blockchain.pdf

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Private blockchain

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Source: https://www.pwc.com.au/publications/pwc-blockchain.pdf

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Some Use Cases in Australian Financial Services

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ASX will be replacing CHESS with a blockchain based system

CHESS is 25 years old

Private Blockchain solution – licensed participants only

Forming an exact chain of title over time

Advantages – efficiency, reduced reconciliation, more timely transactions and better quality data

A prototype DLT has already been implemented and tested

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Crytpobonds and Bank Guarantees

Debt Capital Markets •Prototype blockchain •Queensland Treasury Corporation •Smart contract to manage issuance, transfer of ownership and coupon

payments •Digital currency used to facilitate payment for the bond

Bank Guarantees for Commercial Property Lending •Digitised on a blockchain solution with nodes for tenant, landlord and

bank •Smart contract ensures nodes can only undertake permitted actions

on the shared database •Transaction encryption ensures confidentiality

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Some Insurance Use Cases

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Some Insurance Use Cases

Blockchain verified customer

data

Claims Management Disintermediation

IoT Integration Parametric Insurance

Platforms and Ecosystems

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Blockchain verified customer data

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Identity Management - Sovrin

Public, permissioned blockchain

Keys and identifiers

Claims

Disclosures

Consent Receipts

Source: https://sovrin.org/wp-content/uploads/2018/03/How-Sovrin-Works.pdf sli.do

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https://sovrin.org/wp-content/uploads/2018/03/How-Sovrin-Works.pdf


Civic

Secure, low-cost identity verification on the Ethereum

blockchain

Decreases cost of identity verification for service providers

Improves security of personal information for users

Token incentives for Users and Validators

Source: https://www.civic.com/ sli.do #Pricing2018


Datum

Sources: 1. https://datum.org/ 2. https://calc.datum.org/

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https://datum.org/

https://calc.datum.org/


Fraud Protection

1.6 million diamonds stored on the blockchain

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Disintermediation

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Disintermediation – the role of Brokers

Less need for admin and data transfer

Automated processes

Expect efficiency gains – pressure on commissions?

Focus on more value added advisory services

Blockchain = disintermediation

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Fynance

German digital broker Fynance app

Expect the industry will move to B3i

standard blockchain

50% efficiency gains for their business +

lucrative commissions

ICO to raise funding to buy up broker

portfolios

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Peer to Peer Insurance

What is a DAO?

Advantages for P2P insurance

Challenges

Source: https://www.the-digital-insurer.com/blog/insurtech-teambrella-and-the-third-wave-of-peer-to-peer-insurance/

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Some Peer to Peer Startups Teambrella • Team mates make reimbursement payments from crypto wallets • Includes voting on policy rules, team members, risk premiums, claim payments • Bike and Pet “teams” implemented in Europe and South America

Dynamis P2P • Ethereum based smart contract DAO • Provides unemployment insurance • Uses social media footprint to identify individuals

Picnic Insurance • Australian based P2P (member’s collective) • Seeking APRA licensing • ICO mid 2018

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IOT Integration (Mobility Data)

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Telematics / Mobility Data Dovu • First mobility cryptocurrency • Distributed marketplace for transport data

Cybercar • Blockchain based connected vehicle platform • Brings trust and integrity to data

Toyota • Mobility data ecosystem • Accelerating development of autonomous driving technology

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MOBI

Announced 2nd May

Key partners Objectives

Projects Why blockchain?

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Parametric Insurance

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Parametric Insurance - Oracles

Software Hardware Inbound Outbound Consensus

Sources: • The Blockchain – the Ultimate Disruptor. Tim Lea presentation to ANZIIF Insuretech Conference • https://blockchainhub.net/blockchain-oracles/

Types of Oracles

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Fizzy – Flight Delay Insurance

Startup backed by AXA

4 click purchase

Information stored on Ethereum blockchain

Currently in beta phase so limited to a single route (CDG to JFK)

Source: https://fizzy.axa/ sli.do

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Platforms / Ecosystems

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B3i Consortium

Property Cat XOL Product Developed

Consortium to standalone company

Prototype produced September 2017

Private and shared ledger elements

Quote, bind, settlement

Source: https://b3i.tech/our-product.html sli.do #Pricing2018


Galileo Platforms

Blockchain based eco-system

Smart contracts covering entire policy lifecycle

Launching in October 2018

Why blockchain?

Source: http://www.galileoplatforms.com/what-we-do/ sli.do #Pricing2018

A few interesting projects…

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Golem

Decentralised supercomputer

Airbnb of cloud computing

App registry for software

developers

GNT token for payment

Focus on machine learning

Source: https://golem.network/doc/Golemwhitepaper.pdf sli.do #Pricing2018


Syapse.ai

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Concluding Thoughts…

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My thoughts on all this….

It’s early days..

It will impact my job

Converging technologies

A lot happening

in insurance!

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Questions and comments?

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Contact

Nelson Henwood

Director

Tel: +61 2 8252 3460

Mobile: +61 438 656 341

Email: [email protected]

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Distribution & Use

Reliance & Limitations This presentation has been prepared for the Finity Consulting Personal Lines Pricing & Analytics Seminar, held on 22 May 2018. It is not intended, nor necessarily suitable, for any other purpose. Third parties should recognise that the furnishing of this presentation is not a substitute for their own due diligence and should place no reliance on this presentation or the data contained herein which would result in the creation of any duty or liability by Finity to the third party.

Finity wishes it to be understood that the information presented at the Seminar is of a general nature and does not constitute actuarial advice or investment advice. While Finity has taken reasonable care in compiling the information presented, Finity does not warrant that the information provided is relevant to a particular reader’s situation, specific objectives or needs. Finity does not have any responsibility to any attendee at the conference or to any other party arising from the content of this presentation. Before acting on any information provided by Finity in this presentation, readers should consider their own circumstances and their need for advice on the subject – Finity would be pleased to assist.

Copyright©Finity Consulting Pty Ltd

Personal Lines Pricing & Analytics Seminar 2018 · Personal Lines . Pricing & Analytics . Seminar...

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