London Market Group Looks to Blockchain for Insurance Applications
The London Market Group (LMG) announced recently that it will be backing a research project with an aim to study insurance contracts of the future utilizing blockchain technology. Current processes are cumbersome and vague, which would provide significant assistance for contract participants in the future.
The London Market Group is a market-wide body, bringing together specialist commercial insurance broking and underwriting communities in London. With a focus to retain the London market’s position as a “vibrant international financial services sector,” they have taken notice of the implications that cryptocurrency technology could have, in specific smart contracts.
The research will be spearheaded by Z/Yen, London’s leading commercial think-tank which was founded in 1994 “to promote societal advance through better finance and technology.” Joining them in these efforts is the London Market Target Operation Model (LM TOM), which will bring in wholesale brokers, insurers, re-insurers, and transaction processing organizations to develop a standard view of the potential benefits that smart contracts could have.
Professor Michael Mainelli, Executive Chairman of Z/Yen, added:
“We are delighted to have been commissioned to undertake this research. The London wholesale insurance community is thinking ahead about a combination of new technologies that could transform the way we do business with clients, rather than just leaping on the Blockchain bandwagon.”
The research project will look at improving upon current implementations as well as future products and process which will utilize smart contracts to run on blockchain technology. Smart contracts, in essence, are pre-written lines of code that are self-verifying as well as self-executing, while being tamper resistant due to being stored on the blockchain. These desirable attributes lend it to many applications, especially within the financial and banking industry.
Justin Emrich, CIO of Atrium Underwriters and sponsor of the innovation work stream within the LM TOM said:
“There is significant hype around Blockchain and smart contracts these days. It is the ‘next big thing’ according to the technology world, so we have commissioned Z/Yen to assist us all in understanding the potential application of these technologies in wholesale insurance.”
The findings of this endeavor are scheduled to be finalized before the end of 2016. Also, the “Simple Executive’s Guide to Smart Contracts” will also be produced, educating insurance professionals on the numerous features, nuances, and benefits of the underlying technology that powers smart contracts.