Blockchain for Insurance –

Opportunities and Approach

O c tober 2019

R3 - Background 1

Industry challenge: “what I see is not what you see”

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NOW

?

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am owed This is what I think

I owe

SUPPLIER CUSTOMER

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AFTER

BLOCKCHAIN

Shared Truth

Shared business logic

Shared data

Shared network

We both see the

same thing

SUPPLIER CUSTOMER

R3 Timeline

Sep 2014 | First R3 roundtable

held in NY; attended by eight

banks to understand blockchain

Dec 2015 | R3

consortium grows to 42

bank members

Nov 2016 | Corda

Open Sourced

Jul 2018 | Corda

Enterprise 3.0 launches

Aug 2018 | Ecosystem grows to 200+

financial institutions, regulators, trade

associations, professional services

firms and tech companies.

Sep 2015 | Nine banks form a

partnership with R3 to design and

deliver advanced DLTs to global

financial markets

Sep 2017 | Corda v1.0 GA

May 2019 | Corda Enterprise

v4.0 Release, adding

significant functionality

required by leading clients,

such as B3i

Jan 2019 | Corda Network

goes into Production

Dec 2018 | Corda

Foundation Launched,

Sep 2019 | Corda Enterprise

v4.2 Release, adding

significant HSM functionality

needed for security in

enterprises

R3 Insurance Timeline

July 2018 | RiskBlock migrates to

Corda Enterprise from Ethereum

Jan 2018 | B3i

Migrates to

Corda from

Hyperledger

Jan 2017 | R3

(Re)insurance

CoE is launched

in partnership

with ACORD

Oct 2018 | Insurance

Cordapp Trial for ILW

successful

Jan 2019 | Insurtech

Challenge Launched

March 2019 |

Insurwave LIVE

and on the

Corda Network

(tCN)

July 2019 | B3i

onboards on to

tCN

Aug 2019 |

Round 2 of

insurtech

challenge

successful; 4

CordaCon

finalists

Sep 2019 |

RiskStream goes

LIVE *

Corda for Insurance

Insurance Platform Requirements Corda Features

Privacy and security Emphasis upon privacy by sharing transactions on a need-to-know basis plus

enterprise security features (Firewall, HSMs)

Reduce duplication and ensure finality of transactions Solves issue of duplicate insurance for same asset and profiting from claims.

Notary delivers transaction finality.

Network interoperability Corda is designed to allow interoperability between all CorDapps and nodes. Well

suited to ACORD message types.

IT system interoperability Java based, connects to existing core insurance platforms (ex. DuckCreek,

Guidewire) through APIs, RPCs, and oracles

Scalability Corda is designed to meet high performance requirements at scale

Legal prose in smart contracts Insurance policy is essentially the legal document transactions and events are

triggered from.

Support 24/7 production support on non-community version

Corda adoption is being driven through the R3 ecosystem of 350+

members

• Recreate existing

business networks with

banks, wealth, SMEs

and corporates

• Grow your existing

network through R3’s member base

• Collaborate with

Regulators, Central

Banks, and Legal

Institutions

Ecosystem Part icipants

Delivery Partners

Infrastructure/Tech Providers CorDapps

• Deploy on your technology of choice

• Integrate with legacy systems

• Increase efficiencies across

your business by utilizing

ready-built CorDapps

• Collaborate with system

integrators to move your

CorDapps to production

• Accelerate your go-to-market

strategy

R3 Ecosystem

2 Why Blockchain?

Blockchain is NOT a piecemeal approach

Combined Ratio

Losses

Expenses

Earned Premiums

RPA, ML, core system

modernization

AI, advanced analytics

New products and pricing

models , alternate

distribution channels

When leveraged correctly…

3 What’s the industry doing?

Corda is being leveraged across the (re)insurance value chain…. Product

Development &

Marketing

Sales &

Distribution Underwriting

Policy Admin

and Servicing

Claims

Management

Treasury Mgmt,

Billing &

Payments

Value Chain Risk Mgmt

Re

du

ce

ex

pe

nse

s

Efficiency gains

Reducing claim

costs

Automation Blocksure

Re

du

ce l

oss

es Real-time data

POI verification

Fraud detection

Incr

ea

se

Pre

miu

m

Premium

financing

Alt distribution

channel

New product

development

MIDAS

B3i

Insurwave Insurwave

Insurwave

ChainThat ChainThat

RiskStream

RiskStream

Infosys

Infosys

Blocksure

Insure Small

Insure Small

TrustLayer

Ledgertech

LIVE

PILOT

In-flight POC

(Re)insurance

Platform

Technical

Accounting &

Settlement

Proportional reinsurance

premium and claims

settlement on ledger

Near Term (1-3 years)

Moving from discovery to production for early use cases focusing on

efficiencies in the value chain

Claims settlement for

complex reinsurance

policies ex. Risk-

attaching / loss-

occurring

Trigger based invoicing

Contract Placement Smart-contract

based elementary

claims triage for

XOL Reinsurance,

parametric

insurance etc

Fact verification via

Oracles and data

providers for CAT

Loss settlement

Medium Term (3-5 years)

Blockchain benefits proven and use cases expanding into

enabling new insurance products. End-to-end eco-system

participants growing enabling new opportunities.

Long Term (>5 years)

Blockchain established with an abundant eco-

system. Blockchain under-pins and enables other

technologies to be fully realised.

Smart-contract based

auto-underwriting for

simple reinsurance

policies ex. Reinsurance

treaty

IoT based loss control

There’s much much more that can be done with Corda…

Cash on ledger for

instantaneous

settlement

Cross-asset contract

placement and claims

triage ex. Combining

marine cargo and hull

risks

Regulator integration for

Multinational Programs

for tax calculations

IoT based dynamic risk

pricing

For your Corda journey…

Familiarize Identify a use case Sanity test Build it right Production

1. Understand key differences

2. Identify relevant business processes / areas

1. Identify key business drivers

2. High-level business case and ROI formulation

1. Don’t reinvent the wheel 2. Work with committed

n/w participants

1. Work with an experienced,

certified team

2. Build for the future – on Enterprise from Day 1

1. Plug into a mature n/w ex

B3i

2. Work with established BNG’s and BNO’s ex B3i

Contact us at insurance@r3.com

r3.com

New York 11 West 42nd Street, 8th Floor New York, NY 10036

London 2 London Wall Place, London, EC2Y 5AU

Singapore 80 Robinson Road, #09-04 Singapore, 068898

Thank you

4

Appendix

4.1

Corda Enterprise

Corda Enterprise – Ready for Business

Proven performance

Handle 600> transactions per

second (TPS) and validate and

enhance setup with performance

test suite

Secure + private

Transaction history is shared on

a unique ‘need to know’ basis. HSM integration ensures

protection for signing keys.

Cloud Deployment / Management

Deploy Corda Enterprise easily with

templates on cloud platforms,

quickly standup nodes e.g. with

Docker distribution

Interoperability

Corda Enterprise is 100% interoperable

with Corda open source. Corda Network

enables blockchain networks to transact

with one another.

Enterprise integration

Packaged integration with mission

critical systems and the most

widely used database technologies

Corda Firewall

Ability to operate a Corda node

securely inside an enterprise

datacentre

Production Readiness

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We are in the production era of blockchain applications. Many platforms will fail to make the transition

from POC to production

Key concerns:

• Security – How will I deploy my node in an enterprise environment?

• Resilience – How will I meet the runtime objectives of my users and stakeholders?

• Scalability – How will my applications scale to production volumes?

• Integration – How will I integrate with my existing systems?

Proven Performance

• Node throughput scales with the number of available cores

• Network throughput scales with the number of available notaries

• On Corda 3.0 Accenture and DTCC demonstrated network throughput in excess of 20k tx/sec

• Benchmark study showed 115 million transactions in 5 hours

across 170 nodes, handling 6,300 requests per second

• Corda Enterprise 4.0 can handle

twice as much workload Jennifer Peve,

Managing Director, co-head of fintech office, DTCC

In the study, conducted by Accenture….R3 proved that DLT can support average daily trading volumes in the US equity market of

more than 100 million trades per day.

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Production Environment Flexibility We can support a myriad of infrastructure models for clients while providing enhanced security, performance and privacy

features

• Microsoft and R3 have partnered to not only provide Corda on Azure, but Corda is adding capabilities to take advantage of rich features Azure is developing to support blockchain platforms

• Intel has partnered with R3 to make Corda capabilities availability within Intel’s Software Guard Extensions (SGX) hardware security module

• HPE is building Mission Critical DLT but installing Corda on Nonstop Servers for rapid Blockchain-out-of-a-Box solutions

• Amazon and R3 have partnered together to have Corda available on AWS Marketplace, which allows AWS users to develop CorDapps or deploy example CorDapps from R3 directly from AWS Marketplace.

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