Blocksure technology could split premiums at source

Blocksure has developed a revolutionary insurance operating system covering sales, administration and claims and built on blockchain technology, as chief executive Ranvir Saggu explains to Intelligent Insurer.

Blocksure is a technology company that has developed a proof of concept insurance operating system covering sales, administration and claims built on blockchain technology. As part of its core offering, it is working on building a better way of premium collection and client money management.

Ranvir Saggu, the chief executive of Blocksure, says the new technology will revolutionise a number of processes across the industry. An example is how client money is handled. Blocksure’s solution should provide increased certainty for insurance customers that their money will be handled correctly and it will speed up the process dramatically.

Premiums can be collected instantly by insurers rather than having to wait months for the broker to pass the cash through. Saggu says the company will be seeking clarification from the UK’s Financial Conduct Authority (FCA) in terms of the implications of such a change in the industry.

Saggu is one of the speakers at the Intelligent Automation in Insurance event being run by Intelligent Insurer in London on April 26.

“The process means client money passes slowly through a chain: from broker, to MGA, to carrier to reinsurer, each taking their slice over time. In the future there should be no delay in each party receiving their cash,” he says.

“We are trialling this at the moment but it should be revolutionary for the industry.”

This solution will complement the company’s core offering: Blocksure OS. Its decentralised blockchain-based technology allows networked ecosystems to collaborate and grow, makes technology scalable by using smart contracts, reduces processing costs by between 30 and 50 percent and improves transaction speeds to seconds rather than months.

Realising the potential

Saggu adds that carriers and brokers are increasingly open to understanding the potential of blockchain for all these reasons.

“The thing about intelligent automation is that so much in the industry is still done manually. Blockchain is the basis of the solution to this. Once we illustrate its potential to clients and the way smart contracts enable its use, we find companies increasingly willing to explore its potential,” he says.

He notes that Blocksure OS uses Corda, a blockchain platform developed by R3, an enterprise software company. He stresses that while leveraging the transparency and security blockchain offers, this also allows elements of the chain to be kept private so that participants can see only the transactions and details that apply to them directly.

“Blocksure OS also demonstrates how blockchain technology can be deployed to improve a customer’s experience when buying insurance, and to make it easier for brokers and insurers to interact,” he adds.

“It shows how blockchain can benefit the insurance industry; the base concept can be transferred to any product or market. We aim to be part of the future of insurance and help drive the transition that will see more and more business transacted in the blockchain ecosystem.”

He stresses that more carriers want to grasp the advantages this can offer. “The industry is getting here—they don’t understand fully the capabilities of it yet and some are grappling with how they will implement it. One problem is that everyone has legacy systems and they think blockchain will replace those, but that is not necessarily the case.”

Saggu explains that Blocksure recommends clients first apply it to specific projects internally. “We find that once people understand its capabilities, they start rethinking what else they can apply it to internally.

“They also start to understand how it can enhance the customer’s journey at all stages. I understand that insurers want cost reductions and new revenue streams. Therefore, we apply this to new areas of the business first, to demonstrate how it can enhance growth and cost savings.”

There is still education needed, he says, and Blocksure is aiming to help hundreds of brokers over the next year understand the advantages of blockchain-based systems.

But, he adds, he is always wary of arguing that a failure to adopt such new technologies will lead to businesses being left behind.

“We don’t tell people how to run their own businesses. They may have a different focus anyway; what we do is look to educate people on the benefits so that they investigate this properly and consider the potential benefits themselves.”