Much less coordination, far fewer administrative actions and therefore a much more efficient process of reinsurance. These are some of the benefits that Achmea is able to deliver through a new Blockchain collaboration. Initially launched as a unique solution for freight transport insurance, Achmea is actively investigating new opportunities using Blockchain that are now emerging.
Blockchain has long been touted as a revolutionary technology with the potential to transform the insurance ecosystem by automating processes, increasing efficiency, security, data accuracy, fraud detection, and reducing costs.
If Blockchain technology proves to be a viable tool, it could transform the insurance industry through a shared, transparent record of contract-related information. Streamlining communication and transactions would subsequently improve industry processes and provide better insurance services to customers.
In January 2020, Eurapco, a strategic alliance of eight primarily mutual European insurers (including Achmea), and B3i, a global industry-led Blockchain initiative, announced the launch of Eurapco Unity, the first global operational solution on Blockchain infrastructure, enabling the transfer of facultative risks within a network of companies.
Following in-depth market and technological research, marine insurance/reinsurance were identified as areas where blockchain could bring concrete benefits by increasing transparency and security, while significantly reducing administrative effort.
How does it work?
Sergey Niunco, Manager of Marine Underwriting and International Desk, and his team are involved in the development for Achmea. He explains: “At Achmea, we underwrite goods transport insurance. If we cede part of the risk to Eurapco partners, this normally involves an awful lot of administration. This is all done manually now, because they are tailor-made risks. With this solution we automate parts of the reinsurance process and we are taking an enormous efficiency step”.
"When you think of Blockchain, you may immediately think of Bitcoin. But the solution that Unity uses is, unlike Bitcoin, a so-called private Blockchain. Where public Blockchains, such as Bitcoin, are intended to enable transactions between unknown parties, private Blockchains are usually used. between parties who already know each other".
The advantage? Private Blockchains are usually much more efficient and the data is not public. "Everyone can view all Bitcoin transactions. You can imagine that we do not want our competitors to be able to view our contracts just like that. Unity is a private Blockchain solution that is mainly applicable to inefficient processes in the exchange of risk information with external parties" explains Niunco.
The role of B3i
To further explore the potential use of distributed ledger technology for the insurance industry, Achmea joined the Blockchain Insurance Industry Initiative B3i in February 2017.
In this collaboration, members of the B3i initiative explore the ability of distributed ledger technologies to increase efficiencies in the exchange of data between reinsurance and insurance companies.
Brian Heiblom, Innovation Manager at the Achmea’s Innovation & Experience Centre, was involved in setting up B3i from day one. “About five years ago, Achmea and 14 other insurers and reinsurers from all over the world started looking at how we can organise the reinsurance market in a smarter way. That partnership eventually led to a joint venture: B3i”.
B3i was already being applied within Achmea Reinsurance, and now with the application of Unity, there is a second product. “Achmea, together with Eurapco partners worldwide, is the first to purchase a second B3i product. This really puts us at the forefront of the world” says Heiblom.
“What's great: it is twofold. On the one hand, what we are doing in this case with freight transport insurance is a success story in itself. On the other hand, it is also a success story, because we once invested in B3i believing in the promise of the technology and that the following useful solutions for Achmea are now emerging. And it doesn't stop here”.
Where are other opportunities?
For now, the technology will be used in transport insurance. But that is just the beginning.
“We are of course also looking further, where are the priorities for this year?” says Sergey Niunco. “Are we going to expand the functionality of the existing application for goods transport insurance? But we can also look at other products beyond that.”
“The technology is particularly useful for making processes around information exchange with external parties more efficient,” adds Brian Heiblom. “Especially when it comes to exchanging information about risks of certain objects. There is a lot to be gained there.”
“Over the years, we have built up a lot of experience with this technology and continue to look at where it can offer value for Achmea and its customers”.
