B3i Tech Acquisition Insights has acquired blockchain platform B3i, which aims to bring greater efficiency to the insurance market. Using blockchain, which creates a secure ledger of data, preventing unauthorized changes to be made, the B3i platform will allow insurers, MGAs and brokers to automate a range of processes. It will also support the creation of new products such as catastrophe bonds and collateralized reinsurance.
B3i was formed in 2016 through a collaboration of insurers and reinsurers with the goal of exploring the potential of Distributed Ledger Technologies (DLT) within the re/insurance industry. It raised tens of millions of dollars in its first few years of activity, and gained the support of many of the world’s largest insurance and reinsurers as shareholders.
Unpacking the B3i Tech Deal: What UK Investors Should Know
However, it seems that B3i lost sight of its original goal of bringing full end-to-end efficiency to the marketplace for reinsurance risk transfer and trading. Its latest move, to use R3’s Corda blockchain system, suggests that the initiative has decided to take a less disruptive approach and work with existing reinsurers and brokers rather than try to disrupt them from outside.
The B3i team will continue to explore ways of reducing costs, simplifying processes and improving efficiency in the re/insurance industry. In particular, it will look at parametric insurance, which involves pre-specified payouts based upon trigger events such as weather measurements. The system may be able to standardise the issuance and trading of such instruments, which would benefit ILS investors as well as traditional re/insurers.