B3i Community Conference - Insurwave

Insurwave – B3i
Community
Conference
15th November 2018

The Insurwave proposition began 18 months ago and have now
launched a live blockchain-enabled platform starting with marine
Engage
Industry
stakeholders:
Phase 2:
Extending
functionality,
technologies and
lines of business
Development
”Live” distributed
ledger platform
Initial EY
investments
Blockchain proof of
concept for marine
insurance
Phase 1
launch:
Initially with
collaborators
Proof of
concept
Successfully
concluded
March 2017
A blockchain-
enabled platform
for the insurance
industry
Development into
new areas, such
as Cargo and
Aviation
2016 2017 2018
$
Future
Insurwave | Blockchain enabled platform for Marine Insurance | EY 2018

We have brought together the right viewpoints and skills to take
a platform forward
1010
0101
1001
In
collaboration
with:
In
collaboration
with:
Built by:
Data standards from:
Infrastructure from:
Previous collaboration with XL Catlin

► Complicated supply chain with multiple
pain points
► Bimodal landscape
► Impacted profitability due to capacity
and demand
► Stalled freight rates and efficiency
challenges
Shipping
industry
► Declining by 5% annually (since 2012)
► Declining rates and performance
► In-accurate capture and leverage of hull
and cargo data
► Duplicate activities between insurers
and brokers - sustaining high FTE
headcount
Marine
insurance
Key ChallengesMarine ecosystem
Marine shipping co. Shipping supply chain Financial services
Maersk
Manufacturing/
sourcing
Wholesalers
Distributers
Ports
Government
bodies
End consumer
AON
Insurance
Brokers/intermediaries
Willis JLT
Insurers P&I clubs
Lloyds The London
Loss adjusters
Crawford
Reinsurance
Swiss Re Munich RE
Banks
Financing
Commodities trading
HSBC Bank of America
Bunge ADM
The Marine Market
The shipping and marine insurance industries are facing significant operational and financial
challenges
Insurance Blockchain | EY 2018 | All Rights Reserved

Market Challenges
With this having a number of implications – within Marine – and across the insurance industry more
broadly
Operational challenges
Duplication of data and
process
Lack of transparency and
limited automation outside of
high volume personal lines
High levels of reconciliation
and cumbersome post-sale
activities
Limited tracking of
exposures to execute claims
and reinsurance recoveries
Implications
Consistent technical results
and growth difficult
Exposures, accumulations &
credit risk
Cash locked in
unnecessarily
Lack of agility and high
acquisition costs across the
value chain

We identified a number of problems we are trying to address
Better-working insurance: moving blockchain from concept to reality
Visibility of exposures, standardisation of data
Traceability and data provenance
Improved accuracy of contracts to pricing terms
Automation in client service
Removal of redundant activities
Auditability and transparency
“Insurance transactions are currently
far too tedious and frictional. The
distance between risk and capital is
simply too far.
Blockchain technology has the potential
to facilitate the desired development
that is long overdue.”
Lars Henneberg,
Head of Risk and
Insurance,
Maersk

The platform is a combination of distributed ledger technologies and digital
applications which drive data, smart contracts and automated reconciliation
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Smart contract logic applied
to automate post-sale
activities
Automated responses
to risk changes based
on smart contract
rules
Greater sophistication
and accuracy of
pricing, leveraging
improved data
Codiﬁcation and structuring of
customers’ risk information to
provide richer data sets for
underwriting
Structured data captured
and securely shared in
real time with embedded
regulatory controls
Digitization of paper policies
and terms into smart contracts
Insurwave
platform

The platform has been designed to allow multiple parties to share data about
vessels, to integrate IOT for war risks and to link to multiple ledgers
► Platform provides live updates to location of ships and
risk areas including war zone breaches
► New types of data, exposures can be added for fleets
► All ship data, assets, values, contracts are posted to
copies of data shared across the network
► Statements can be issued for settlement (end 2018)
► Live updates on vessel location, including war-zone alerts,
notifications and course tracking
► All changes are posted to a ledger for concensus
► A data base which collects information about ships,
claims and documents
► Includes specific audit trail about ships as data changes to
allow for immediate sharing of data

So what does this all mean?
War Risks Declarations video

Our focus has been on addressing a number of strategic priorities emerging from these
challenges
Improving visibility of assets and
exposure understanding
Improving visibility of risk and pricing
Improving response to claims and
increased loss prevention
Automating post-sale activities
Dealing with regulatory controls,
including data protection, cyber
transparency and traceability of
information
Creating new models, including group
reinsurance buying for uneconomic
client segments

Adoption requires us to consider four main areas
► How well ledgers
operate together
► Accurate and
consistent data feeds
► Security and data
ownership
► Co-existence with IT
platforms
► Scalability
► Supporting regulatory
model
► Clear controls around
data storage and
permissions
► Resolution of issues
relating to:
► Privacy
► Timing and location
of transactions
► Cooperation of wide
range of industry
participants
► Rethink of culture,
skills, processes,
inputs, outputs and
KPIs
► Disruption not
digitization of existing
► Leveraging power of
Smart contract
framework and logic
► Time and investment
in growth opportunities
created
Technology
and data1
Regulation
and risk
Organization
Disruption
and growth2 3 4

The infrastructure for cloud and blockchain also needs us to build a model which
is consistent between jurisdictions
Distributed Ledger linking all parties with risk, claims and settlement data
Technology Partners: ACORDGuardtime MicrosoftR3/Corda

Questions?

EY | Assurance | Tax | Transactions | Advisory
About EY
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to all of our stakeholders. In so doing, we play a critical role in building a better working world for
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© 2018 EYGM Limited.
All Rights Reserved.
EYG/OC/FEA no.
ED None
EY-000055539-01 (UK) 02/18. CSG London.
This material has been prepared for general informational purposes only and is not intended to be relied upon as
accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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