Blockchain Insurance Strategy
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The document discusses potential blockchain use cases for the insurance industry. It describes joining existing blockchain networks to quickly generate revenue. Three specific use cases are summarized: 1) reducing supply chain inefficiencies in global container trade through the TradeLens network; 2) improving food recall transparency and speed through the FoodTrust network; and 3) streamlining regulatory reporting requirements through a proposed Insurance Data Link network. The document advocates joining existing networks to accelerate blockchain projects and time to value for insurance businesses.
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Blockchain Insurance Strategy
- 1. 2019 Blockchain Insurance Strategy Discussion
- 2. 2 Get started on your blockchain journey Extend a network Build business models & new applications through the integration with established networks & advanced technologies. Commercialize your network Apply proven frameworks & expertise to address complex legal/ governance & operational challenges, & deliver a production network. Build or Join a network Prioritize the best use cases and networks for your business, and rapid development of a minimum viable network in 12 weeks or less. Start Accelerate Innovate
- 3. First Project to Production Discover 1-3 days Blockchain Education Use Case Validation Design Thinking Workshops Network Identification Requirements gathering Discover Learn Try Buy First Project 4-12 weeks Minimum Viable Product Minimum Viable Ecosystem Business Value Assessments Pilot 6 – 9 Months Pilot – real transactions Legal entity setup and regulatory compliance Governance setup Funding model and Monetization strategy Integrations to existing systems Production 1 Year + Fully integrated solution processing real transactions providing real returns Member recruitment Application maintenance New feature releases Interoperability strategy Form Expand & Activate Scale Live growing network providing real returns Membership recruitment New technology integrations Network interoperability Business, Technical, Legal Considerations
- 4. 4 The Approach: IBM Garage Method The methodology is fueled by a collaborative culture while using the best of: - IBM Design Thinking - Agile - DevOps • Lean • Industry & Business Value Framework
- 5. 5 BUSINESS EXPERTS UX-DESIGNER (PT) UI, CLOUD, AND BLOCKCHAIN DEVELOPERS EXECUTIVE SPONSOR PRODUCT OWNER IBM Client(s) ENGAGEMENT LEADER (PT) BLOCKCHAIN ARCHITECT (PT) DEVELOPERS* PROJECT MANAGER SUBJECT MATTER EXPERTS PT = part time * as appropriate Team Composition
- 6. 6 Top 5 Lessons Learned 1. Dream big – and act incrementally 2. Identify business challenges and opportunities 3. Collaborate to create business value from the beginning 4. Govern for the future 5. Blockchain is a team sport – make connections! 1 2 3 4 5
- 7. JOIN Developing JOIN option(s) for existing networks will offer the fastest way to revenue for our customers We do have developed critical business cases and identified the member types of Blockchain networks that we need to involve All use cases have to be anchored into the rich document and API databases available Selectively building new networks with industry associations and interested parties. BUILD
- 8. 8 Making blockchain real for insurance businesses with JOIN options for active Blockchain networks Identity Trade Lens Container Trade Food Trust Food Provenance Trade Finance Government Distributed Energy Healthcare Provenance Unlisted Securities Insurance Clearing & Settlement Bank Guarantees OpenIDL Insurance Data WorldWire
- 9. 9 Global ContainerTrade - Open Ocean Cargo Insurance JOIN Use Case 1 9 Potential Business Impact • Reduce Cost by having more timely and accurate information • Reduction of delays of shipments and goods flow • Reduce risk by ensuring compliance with regulations
- 10. 10 Global ContainerTrade - Open Ocean Cargo Insurance JOIN Use Case 1 - NEXT STEPS • Schedule a 1 to 1 1/2 day planning (mini-garage) session with 2-3 insurance companies to perfect the Open Ocean Cargo Insurance use case – IN JANUARY 2019 • Jointly fund a 6-10 week Recall Insurance use case Pilot • We want to structurally approach the Open OceanCargo Insurance use case as an 'app' that is running on top of the FoodTrust 'AppStore' network without having to change attributes of objects on the FoodTrust network itself, but rather extracting necessary information for insurers to be able to create and manage certificates of insurance.
- 11. 11 OCEANTRANSPORT DESTINATIONPORT DESTINATIONINTERMODALSHIPMENTPLANNING ORIGININTERMODAL EXPORTCOMPLIANCE ORIGINPORT IMPORTCOMPLIANCE Event Source Start Shipment Shipper, Tracking 3PL AddShipment Shipper, Reference 3PL Start Container Transport tracking Carrier Add Container TrackingReference Carrier Add Container to Shipment Carrier Update Physical Container ID Carrier BookingRequest Shipper, Submitted 3PL BookingRequest Confirmed Carrier Shipper Updated Shipper, 3PL Consignee Updated Shipper, 3PL Cargo Type Updated Shipper, 3PL Shipping Instructions Submitted Shipper, 3PL PackedContainer Interchanged Carrier, 3PL End Container Tracking Carrier Event Source Shipper Shipper, 3PL Carrier, Shipper, 3PL Carrier, Trucker, 3PL 3PL, Trucker, Terminal 3PL, Trucker, Terminal 3PL, Trucker, Terminal 3PL, Trucker, Terminal 3PL,Shipper 3PL, Shipper Packedcontainer sealed Packing list available Estimated Loading onTruck Loaded onTruck Estimated GateIn GateIn Estimated Discharge from Truck Discharge from Truck Estimated Stuffing Start Stuffing Started Estimated Stuffing Completed 3PL,Shipper Container Stuffed 3PL,Shipper Estimated Loading on Rail /Barge 3PL,Rail Loaded on Rail/ Barge Rail,Barge Rail /Barge ETD 3PL,Rail, Barge Rail /Barge ATD Rail,Barge Estimated Discharge fromRail /Barge Rail,Barge Actual Discharge from Rail /Barge Rail,Barge Event Source Export documentation Customs submitted broker approved Export documentation Customs Customs release Customs DangerousGoods declarationsubmitted Shipper DangerousGoods requestapproved Carrier VGMsubmitted Shipper, 3PL Geographyspecific certificate submitted 3PL Geography specific certificateapproved Customs Event Source Terminal Terminal Customs Customs Customs Terminal Terminal, Trucker, 3PL Terminal, Trucker, 3PL Terminal, Trucker, 3PL Estimated Discharge from Vessel Discharged from Vessel Packed container not selected for inspection Packedcontainer passed inspection Packedcontainer selected forscan Estimated Loading onTruck Loaded onTruck Estimated GateOut Gate Out Estimated Loading on Rail /Barge Terminal, Rail,Barge, 3PL Loaded on Rail/ Barge Terminal, Rail,Barge Rail /Barge ETD Terminal, Rail,Barge, 3PL Rail /Barge ATD Terminal, Rail,Barge Terminal release Terminal Carrier release Carrier Event Source Terminal, 3PL,Trucker Terminal, 3PL,Trucker Terminal, Trucker, 3PL Terminal, Trucker, 3PL Terminal, 3PL,Trucker Terminal, 3PL,Trucker 3PL, Trucker, Terminal 3PL, Trucker, Terminal Rail,Barge 3PL,Rail, Barge Estimated Loadingon Truck Loaded onTruck Estimated GateOut Gate Out Estimated GateIn GateIn Estimated Discharge fromTruck Discharge fromTruck Loaded on Rail/ Barge Rail /Barge ETD Rail /Barge ATD Rail,Barge Rail /Barge ETA 3PL,Rail, Barge Rail /Barge ATA 3PL,Rail, Barge Estimated Discharge from Rail /Barge Rail,Barge Actual Discharge from Rail /Barge Rail,Barge EndShipment Tracking Shipper, 3PL Seal(s) removed Shipper, 3PL Container stripped Shipper, 3PL Event Source Terminal, 3PL, Trucker 3PL, Trucker, Terminal 3PL, Trucker, Terminal 3PL, Trucker, Terminal 3PL,Rail, Barge Rail, Barge, Terminal Rail, Barge, Terminal Rail, Barge, Terminal Estimated GateIn GateIn Estimated Discharge from Truck Discharge from Truck Rail / BargeETA Rail /Barge ATA Estimated Discharge from Rail /Barge ActualDischarge from Rail /Barge Estimated Loadingon Vessel Terminal Do notload Carrier Loaded onVessel Terminal Event Source submitted Advance declaration Carrier approved Advance declaration Customs Import documentation submitted 3PL Import documentation approved Customs Customsrelease Customs Certificate oforigin available 3PL Cargospecific certificate submitted 3PL Cargo specific certificate approved Customs Event Source Terminal, Carrier Terminal, Carrier Terminal, Carrier Terminal, Carrier Terminal, Carrier Terminal, Carrier Carrier Terminal, Carrier Terminal, Carrier Terminal Terminal VesselETD VesselATD VesselETA VesselATA Estimated Loadingon Vessel Loaded onVessel Bill of Lading available Estimated Discharge from Vessel Discharged from Vessel Shift-cell Shift-pier Tradelens Information Flow – 230+ million events/documents
- 12. 12 JOIN Use Case 2 12 Potential Business Impact Global Food Safety - Recall Insurance • Increase transparency of the product recall process • Exploiting new revenue pools that network surface • Attracting other ecosystem players • Lower dispute costs and potentially lower exposure
- 13. 13 JOIN Use Case 3 13 Potential Business Impact Regulatory Reporting - Data Calls The Insurance Data Link (IDL) is the first open blockchain platform that enables efficient, secure and permissioned-based collection and reporting of statistical data. The openIDL: − Streamlines time-consuming/expensive compliance requirements and regulatory data calls. − New, quantified value from current data and processes. − Operational efficiency and product development opportunities.
- 14. Backup Slides
- 15. Global ContainerTrade Tradelens – Open Marine Cargo What is the business problem? GlobalTrade is hugely inefficient and burdened by paper-based processes. More than $16 trillion in goods are shipped across international borders each year with 80% of the goods consumers use daily are carried by the ocean shipping industry. How is it currently done? Trading is all about manual documentation.There is no trust between counter-parties, so middlemen are used to check if the documentation is right and that the consignment is correct at each checkpoint along the entire route. What are the problems of not using Blockchain? A single shipment of avocados from Mombasa to Rotterdam involves 30 actors, 100+ people, and 200 information exchanges Pilot shipments from Central Europe the US resulted in containers being delayed for 4 weeks due to lack of transparency and delayed information exchange A customer support agent for a freight forwarder may have to make up to five calls to different parties to answer a simple location question Why Blockchain? 1. Reduce risk by ensuring compliance with regulations 2. Reduce Sum Insured by increasing declaration frequency 3. More Accuracy based on subject matter, duration or specific terms 4. Reduce Cost by having more timely and accurate information 5. Increase Revenue through trading partner trust JOIN Use Case 1 15 Potential Business Impact By reducing barriers within the international supply chain, global trade could increase by nearly 15%, boosting economies and creating jobs Reduction of calls and administrative tasks resulting in savings of $Xx million per container boat Reduction of delays of shipments and goods flow
- 16. Global Food Safety FoodTrust – Recall Insurance What is the business problem? In 2018 alone we already experienced more than 200 recalls that were registered on the FDA website. Every recall requires fast tracking of the underlying contamination and near real-time prevention to kick in. Until the source of the problem has been determined all goods are guilty until proven innocent. How is it currently done? Paper- and phone-based tracing products back along the complex supply chain today takes days if not weeks. In a case of life-threatening contaminations this is simply not good enough. What are the problems of not using Blockchain? A single shipment of avocados from Mombasa to Rotterdam involves 30 actors, 100+ people, and 200 information exchanges Tracking a single pack of mangoes takes almost 7 business days – an eternity.With Blockchain-enabled systems only little more than 2 seconds A supply chain person for a retailer may have to make a minimum of six calls to different parties to answer a simple tracking question Why Blockchain? 1. Reduce Risk of Harm to Consumers through rapid and accurate communication 2. Reduce Risk Profile for insurers and insured companies 3. Reduce Cost by making recalls more effective and targeted 4. Reduce Risk by ensuring compliance with regulations 5. Increase Revenue through trading partner trust JOIN Use Case 3 16 Potential Business Impact Increase transparency of the product recall process Exploiting new revenue pools that network surface Attracting other ecosystem players Lower dispute costs and potentially lower exposure
- 17. Regulatory Reporting OpenIDL – Data Call What is the business problem? Regulatory reporting that also provides new insights for insurers, while enhancing timeliness, accuracy, and value for regulators today is a challenge for many reasons. Efficient, secure and permissioned- based collection and sharing of statistical data is a highly manual process. How is it currently done? With traditional means, once data is shared, it is no longer under the sharing entities control. This and multiple legal, e.g. anti-trust laws, collusion, as well as operational an practical considerations make this process very cumbersome. What are the problems of not using Blockchain? Loss of control of shared data with no possibility for a carrier to allow limited access to specific entities No practical and non-disruptive way for insurers to leverage their data and reap the benefits Very difficult to creating an environment where separate legal entities can work together Why Blockchain? 1. Facilitate data exchange by automatic trusted exchanges (Smart Contracts) 2. Maintain control of all data for all carriers 3. Reduce Risk Profile for insurers and insured companies 4. Reduce Cost by making data calls more effective and targeted 5. Reduce risk by ensuring compliance with regulations 6. Optimize Asset Utilization through structured processes 7. Increase Revenue through increased trust amongst carriers JOIN Use Case 4 17 Potential Business Impact Better risk mitigation for carriers and better understand of loss data and underlying causes Better policies by mining shared data that helps the entire ecosystem of insurance carriers Consumer benefits by cost takeout on the insurance carrier side
Editor's Notes
- The digital economy has made trust more important than ever – but also more difficult to establish. Without trust and transparency, vast amounts of value are trapped inside business processes and organizations that don’t connect. Business outcomes driven by blockchain capability, working with current business and technical landscapes, break down barriers to unlock newfound trust and value for your business and industry. No one is faster or has delivered more business value than IBM in commercial implementations of blockchain realizing new growth opportunities, greater efficiencies, and new revenue streams in financial services, supply chain, public services and many other industry use cases. Our array of 1,500+ blockchain experts across the world with deep industry and technical skills will help you design and drive transformative business outcomes, by applying the right expertise, proven methodologies and advanced technologies wherever you are on your journey. IBM Blockchain Starter Services Starter Services help you capitalize on emerging market opportunities and begin to achieve your most important business outcomes. IBM’s industry experts and strategists as well as technical architects and developers who have built a wide range of blockchain solutions will work with you side-by-side, to understand your key challenges, prioritize use cases and networks, deliver innovative solutions and drive your business strategy. The service combines advisory services, business value design, and the rapid development of a minimum viable network — all in 12 weeks or less. IBM Blockchain Acceleration Services Acceleration Services help you commercialize your blockchain network and produce tangible business outcomes. Whether you are a network founder or a part of a consortium, we’ll partner with you to overcome complex legal/governance and operational challenges using proven framework and expertise. We’ll continually iterate to deliver a production network on the secure and scalable IBM Blockchain Platform, seamlessly integrating with your existing processes and systems. IBM Blockchain Innovation Services Innovation Services help you deliver greater value, on established capability or new business models, by turning your forward-thinking ideas to a real solutions delivering business value. IBM’s experts help (re)define and design business value in context of your business, create new application and business models, combining with established networks and other advanced technologies to achieve greater outcomes. Get access to IBM’s leading blockchain, AI, IoT and Data Insights technologies as well as our relationship with established networks to achieve a constant state of your innovation.
- By investing in and convening new collaborative blockchain networks, IBM is enabling companies to scale up their competitive advantage and unlock new value. Collaborative platforms Scalable networks for multi-party value exchange 1. Network #3: A solution to instantly trace food items from “farm to fork” providing transparency across the ecosystem 2. IBM Blockchain World Wire: A universal rail for real-time atomic clearing and settlement supporting the exchange of digital monetary assets 3. Identity: A trusted network empowering consumer to effortlessly and privately control their identity attributes 4. Trade Lens: Joint Venture between Maersk & IBM focused on digital trade – enabled by blockchain to create connected world of frictionless trade
- The path of minerals and metals such as gold, silver, lead and zinc throughout the supply chain to the commodity trading market is typically complex. Manual documentation creates multiple opportunities for fraud, data entry error and delays at each point of contact. As a result, disputes among trading partners, added costs for third-party verification, and transaction processing can create delays due to lengthy reconciliation processes, which in turn can increase costs. So really the objective is to be able to bring transparency and efficiency to the supply chain, which means that participants at every stage of a mineral’s journey from mine to market must be digitized, accounted for and traced. This means that miners, transporters , smelters, assayers and the final marketplace can be on the Blockchain solution, as well as the banks that provide trade financing and regulators that issue and validate certificates and compliance practices. Empowering miners to trade more directly with customers has potentially profound implications for their business models and businesses as a whole. The positive impact to the Business will be; Generate + $425 billion in value for the industry Reduction of 610 million tonnes of carbon dioxide emissions Potentially B$ investment from Trading Companies and Streaming Companies Improved visibility on sustainability built into ecosystem - carbon footprint, indigenous peoples re-settlement, environmental management, etc.
- The path of minerals and metals such as gold, silver, lead and zinc throughout the supply chain to the commodity trading market is typically complex. Manual documentation creates multiple opportunities for fraud, data entry error and delays at each point of contact. As a result, disputes among trading partners, added costs for third-party verification, and transaction processing can create delays due to lengthy reconciliation processes, which in turn can increase costs. So really the objective is to be able to bring transparency and efficiency to the supply chain, which means that participants at every stage of a mineral’s journey from mine to market must be digitized, accounted for and traced. This means that miners, transporters , smelters, assayers and the final marketplace can be on the Blockchain solution, as well as the banks that provide trade financing and regulators that issue and validate certificates and compliance practices. Empowering miners to trade more directly with customers has potentially profound implications for their business models and businesses as a whole. The positive impact to the Business will be; Generate + $425 billion in value for the industry Reduction of 610 million tonnes of carbon dioxide emissions Potentially B$ investment from Trading Companies and Streaming Companies Improved visibility on sustainability built into ecosystem - carbon footprint, indigenous peoples re-settlement, environmental management, etc.
- The path of minerals and metals such as gold, silver, lead and zinc throughout the supply chain to the commodity trading market is typically complex. Manual documentation creates multiple opportunities for fraud, data entry error and delays at each point of contact. As a result, disputes among trading partners, added costs for third-party verification, and transaction processing can create delays due to lengthy reconciliation processes, which in turn can increase costs. So really the objective is to be able to bring transparency and efficiency to the supply chain, which means that participants at every stage of a mineral’s journey from mine to market must be digitized, accounted for and traced. This means that miners, transporters , smelters, assayers and the final marketplace can be on the Blockchain solution, as well as the banks that provide trade financing and regulators that issue and validate certificates and compliance practices. Empowering miners to trade more directly with customers has potentially profound implications for their business models and businesses as a whole. The positive impact to the Business will be; Generate + $425 billion in value for the industry Reduction of 610 million tonnes of carbon dioxide emissions Potentially B$ investment from Trading Companies and Streaming Companies Improved visibility on sustainability built into ecosystem - carbon footprint, indigenous peoples re-settlement, environmental management, etc.
- The path of minerals and metals such as gold, silver, lead and zinc throughout the supply chain to the commodity trading market is typically complex. Manual documentation creates multiple opportunities for fraud, data entry error and delays at each point of contact. As a result, disputes among trading partners, added costs for third-party verification, and transaction processing can create delays due to lengthy reconciliation processes, which in turn can increase costs. So really the objective is to be able to bring transparency and efficiency to the supply chain, which means that participants at every stage of a mineral’s journey from mine to market must be digitized, accounted for and traced. This means that miners, transporters , smelters, assayers and the final marketplace can be on the Blockchain solution, as well as the banks that provide trade financing and regulators that issue and validate certificates and compliance practices. Empowering miners to trade more directly with customers has potentially profound implications for their business models and businesses as a whole. The positive impact to the Business will be; Generate + $425 billion in value for the industry Reduction of 610 million tonnes of carbon dioxide emissions Potentially B$ investment from Trading Companies and Streaming Companies Improved visibility on sustainability built into ecosystem - carbon footprint, indigenous peoples re-settlement, environmental management, etc.
- The path of minerals and metals such as gold, silver, lead and zinc throughout the supply chain to the commodity trading market is typically complex. Manual documentation creates multiple opportunities for fraud, data entry error and delays at each point of contact. As a result, disputes among trading partners, added costs for third-party verification, and transaction processing can create delays due to lengthy reconciliation processes, which in turn can increase costs. So really the objective is to be able to bring transparency and efficiency to the supply chain, which means that participants at every stage of a mineral’s journey from mine to market must be digitized, accounted for and traced. This means that miners, transporters , smelters, assayers and the final marketplace can be on the Blockchain solution, as well as the banks that provide trade financing and regulators that issue and validate certificates and compliance practices. Empowering miners to trade more directly with customers has potentially profound implications for their business models and businesses as a whole. The positive impact to the Business will be; Generate + $425 billion in value for the industry Reduction of 610 million tonnes of carbon dioxide emissions Potentially B$ investment from Trading Companies and Streaming Companies Improved visibility on sustainability built into ecosystem - carbon footprint, indigenous peoples re-settlement, environmental management, etc.
- The path of minerals and metals such as gold, silver, lead and zinc throughout the supply chain to the commodity trading market is typically complex. Manual documentation creates multiple opportunities for fraud, data entry error and delays at each point of contact. As a result, disputes among trading partners, added costs for third-party verification, and transaction processing can create delays due to lengthy reconciliation processes, which in turn can increase costs. So really the objective is to be able to bring transparency and efficiency to the supply chain, which means that participants at every stage of a mineral’s journey from mine to market must be digitized, accounted for and traced. This means that miners, transporters , smelters, assayers and the final marketplace can be on the Blockchain solution, as well as the banks that provide trade financing and regulators that issue and validate certificates and compliance practices. Empowering miners to trade more directly with customers has potentially profound implications for their business models and businesses as a whole. The positive impact to the Business will be; Generate + $425 billion in value for the industry Reduction of 610 million tonnes of carbon dioxide emissions Potentially B$ investment from Trading Companies and Streaming Companies Improved visibility on sustainability built into ecosystem - carbon footprint, indigenous peoples re-settlement, environmental management, etc.