Italy: Major Insurer Launches Digital Surety Bonds on Blockchain
Reale Mutua, a major Italian mutual insurance firm, recently announced the issuance of a blockchain surety bond as part of a national project dubbed “Fideiussioni Digitali” backed by the Italian central ban, Ledger Insights reports August 7, 2020.
Aim to Digitize Operations via Blockchain
Founded in 1828 in Turin, Italy, Reale Mutua is one of the oldest and largest Italian mutual insurance firms. Keeping up with the times, the firm is now embracing emerging technologies such as blockchain to impart a greater degree of transparency and accountability into its business.
To that effect, the company recently issued a distributed ledger technology-based (DLT) surety bond as part of Banca d’Italia’s “Fideiussioni Digitali” national project.
For the uninitiated, Fideiussioni Digitali is a national project backed by CeTIF (Research Centre on Technology), payments network SIA, tech firm Reply, and insurance regulator IVASS. The project also involves close to 30 banks and organizations that seek to digitized the long undisrupted banking and finance industries.
Issuing Surety Bonds on Blockchain
The issuance of a surety bond on the blockchain is a significant feat toward the steady digitization of the Italian surety industry as they are required by government departments for construction contracts to pay out should the supplier fail to perform.
Keeping in mind the exponential rise of frauds in the industry, a blockchain-backed surety bond would ensure the concerned financial institution genuinely backs the bond.
Notably, the surety bond issued by Reale Mutua provides a guarantee to the Municipality of Milan for the completion of reclamation work being conducted by Milano Progetti.
Commenting on the development, Gianluca Lorenzi, Head of Reale Lab 1828, noted,
“Reale Group keeps on investing in innovation, with the firm belief that understanding and monitoring the main trends in the evolution of the company, of the market and of the insurance sector is one of the key success factors for the future. Blockchain technology will bring important advantages along the whole value chain.”
It’s also worthy of note that the project leverages R3 Corda’s enterprise blockchain for its operations.
In related news, BTCManager reported on July 27 that 55 Italian banks were using R3 Corda-powered blockchain solution called Spunta to superfast and secure interbank reconciliations and data transfers.