What can blockchain do for wholesale insurance?
Held on September 5 2016
Michael Mainelli (Director, Z/Yen)
Steve Webb (partner, PwC)
Report: Chain Reaction: How Blockchain Technology Might Transform Wholesale Insurance (Z/Yen / PwC)
I (sort of) get the theory behind distributed ledger technology – aka “blockchain”. I (sort of) get how Bitcoin works – at least in theory. And I can see how having a definitive, unalterable record of all transactions in a particular field, which is visible to all interested parties at all times, could be a huge advantage.
But how do we get there from here? And, when it comes to practical applications, do the compromises that we have to make (“permissioned” vs. “unpermissioned”, for example) undermine the blockchain’s potential to the point that it ain’t worth the candle?
Still, one cannot but notice that very clever people around the world are spending a lot of time (and money) on refining the blockchain concept and applying it to real-world problems.
One such initiative concerns the wholesale insurance market, where tamper-proof record keeping, decentralized processing and ‘smart contracts’ offer the possibility of vastly increased efficiencies. There are other examples of blockchain being used in retail insurance, but (as far as I know) the Long Finance project, supported by PwC (and its Blockchain Development Lab), is the first attempt to apply blockchain technology at the wholesale end. We are, therefore, delighted that two of those most responsible for the Long Finance report, published in July, have agreed to explain what they are up to – and what it would take to operationalize what they see as an enormously exciting technological breakthrough:
- Michael Mainelli, an old friend of the CSFI, is the Emeritus Professor of Commerce at Gresham College, here in the City. He is also the Executive Chairman of Z/Yen (which he likes to describe as a City think-tank) and founder of the Long Finance initiative – which takes a deeper look at the underlying trends shaping global finance. He is an accountant by trade, a technologist by inclination, and a strategist with genuine insights into where finance is headed.
- Steve Webb is the partner at PwC who leads on blockchain for Financial Services. His role is to understand the opportunities and practical challenges of making blockchain work for PwC clients in the financial sector.
OK, let’s be humble. We could all do with learning more about how the blockchain really works. So, feel free to join us for what I am sure (well, at least, I hope) will be a stimulating and clarifying experience.