RiskBlock, the insurance industry alliance, has ambitious plans for an open ecosystem for the entire insurance industry. By the end of the summer, they plan to release the second version of their Canopy blockchain system to allow third parties to connect to their network and build applications.
While the vision is great, so is the financial potential. An app launched later this year could save up to $ 300 million annually in the United States.
Today, The Institutes RiskBlock Alliance has 28 members, including most of the biggest names in the insurance industry in the United States, such as State Farm, Liberty Mutual, GEICO, Nationwide, USAA, Chubb and Travelers.
LEGO set of blockchains
The idea behind the Canopy framework is a set of standardized blockchains. So there is a blockchain policy and a blockchain complaint. They want to avoid reinventing the wheel for each new use case or application, and all use cases will need policies and complaints. So any other blockchain or app will use these basic blockchains.
This does not mean that all industry policies will be stored on every RiskBlock node or server. With its recent adoption of R3’s Corda technology, a business node will only store the policies it is involved in.
In addition to the core framework, they have a level of security and tools to help others develop Canopy. This means that suppliers can create solutions that adapt to the ecosystem. It also allows operators to develop proprietary applications that use the policy blockchain and share data with each other.Christopher McDaniel, director of RiskBlock, spoke to Ledger Insights about his vision. “Our main point with Canopy is NOT that we will be the only ones building applications on Canopy. We want to build an open ecosystem where anyone can connect. ”
“We want to make it an open framework for the insurance industry. And because we are a non-profit organization, we have no profit motive to own you. We want to do the best for the industry. And frankly, the best thing for the industry is to have a structure where everyone connects. ”
The entire insurance industry?
RiskBlock isn’t the only alliance in the industry. There are several local and specialized ones, but B3i, based in Switzerland, is the other sizeable group. B3i’s initial focus is on reinsurance, although it has broader plans that also span an ecosystem. So to this day, the two hardly overlap, but soon they will.
At the recent Blockchain for Insurance Summit, each group positioned itself as global. But each perceives the other as regional.
This year, RiskBlock is creating RiskBlock Canada, RiskBlock UK and RiskBlock Asia. B3i recently appointed a representative from North America. The two groups also have some overlapping members.
McDaniel’s take is that Canopy is designed as an open ecosystem that anyone can connect to, and that includes B3i. The fact that both groups have switched to Corda from R3 facilitates the potential for interoperability.
For now, B3i has a two-pronged approach, before closing the funding round. And second, by launching its Cat XOL reinsurance contract on its blockchain platform this year.
If there are only one or two major blockchain frameworks, is it a potential systemic risk to the insurance industry? What if there is a major flaw in the blockchain policy being implemented across the industry?
It’s hard to deal with, but European regulators have started raising questions like this about blockchain for the banking sector.
There is another regulatory issue that all large blockchain consortia could address: what’s the difference between a consortium and a cartel?