RiskStream develops ‘cost saving’ insurance blockchain with DLT

The Institutes RiskStream Collaborative, a blockchain consortium, is working to leverage blockchain technology using Corda, developed by tech firm R3, as its underlying distributed ledger technology (DLT). Patrick Schmid, vice president of the Risk Stream Collaborative told Intelligent Insurer that using Corda allows communication with other blockchain platforms such as Hyperledger and Ethereum. The company is working with Accenture to build its Canopy platform which will feature claims and policy blockchains leverage the partnership with Corda to create a core set of standardised blockchains.

Schmid said that Canopy’s flagship product is for ‘first notice of loss’ for private passenger auto accidents. “Rather than going back and forth with phone calls customers can use smart contracts. And using QR codes, customers will be able to exchange information allowing different insurers to communicate with each other in a secure environment.”

He added that the high level of security that the blockchain provides will help cut levels of fraud in the claims process. With many insurance players all operating in the same space, an independent, decentralised network facilitator could bring competitors together and achieve a shared version of the truth, saving insurers money in the process, Schmid claimed.

“The need for intermediary verification is a costly and lengthy process for insurers. The findings suggest the RiskStream membership could save between $19-$68 million in year one, $60-$190 million in year two and $99 million-$277 million in year three,” he added.

While the company is a not-for-profit organisation, it does charge member fees and is now looking to move to a new model. “We are adding a corporate full profit element underneath allowing different members of the collaborative to participate through investment,” said Schmid.

Schmid added that while the blockchain consortium is technology driven, their focus remains firmly on the insurance market and solving some of the prominent issues that arise in the industry. RiskStream Labs will also conduct academic work as well as working with governmental agencies such as the National Earthquake Information Centre (NEIC). The company is now seeing increasing interest from reinsurers.

The collaborative is comprised of carriers, brokers and reinsurers, and boasts a membership of almost 50 CEOs.