B3i, the company that is expected to develop blockchain in insurance, declares bankruptcy

At the end of July 2022, the international consortium of 21 insurers and reinsurers behind the Swiss company B3i, which was to develop blockchain-based insurance solutions, announced filing for bankruptcy, unable to find profitability. The beginning of the end of an El Dorado?

Clouds are piling up on the blockchain. Yesterday still a disruptive technology, put to the test and announced as ready to revolutionize all sectors of the economy, in particular with its smart contracts (finance, commerce, insurance, energy, etc.), the blockchain is in a key moment in its development.

Blockchain is no longer as popular as it was in the late 2010s …

Its technological principle – the creation of a decentralized and in principle tamper-proof database – remains promising and could find fields of application as numerous as it is useful.

But the computing power required to create a complex blockchain is a solid thorn in the side, especially in the context of the energy transition and energy access crisis in the West.

Crypto Winter is coming …

Even the main showcase of Blockchain, the crypto ecosystem, is on the verge of overturning, shaken by a rarely seen crisis, baptized “Crypto winter”, which causes bankruptcies, layoffs and chain crash. NFT and cryptocurrency are seeing their value plummet and several industry specialists have gone out of business.

Regarding the other possible applications of the blockchain, after the effervescence of the late 2010s, radio silence is in order. The global economic crisis caused by Covid-19, chained by the current energy crisis, has rearranged the priorities of investors.

Half-auction investments

Betting on such a certainly promising technology now seems irrelevant, as the blockchain does not provide any services that an older technology cannot provide, it simply makes them more secure and robust.

The repeated thefts that have hit the cryptocurrency industry in recent months probably haven’t even helped the technology’s reputation and may have helped discourage some investors.

B3i Services, which is expected to develop blockchain in insurance, declares bankruptcy

The promises of generalization of smart contracts in commerce, energy and finance have remained a dead letter. As a symbol, July 28, 2022 is insurance, sector still considered the most favorable to blockchainwho ended up throwing in the towel.

The international consortium of 21 insurers and reinsurers, which had created the Swiss company B3i Services to develop blockchain-based solutions in the insurance sector, has thus announced the bankruptcy of this company.

Three fundraisers in 2018, 2019 and 2020 and … nothing more

Go back to the beginning of the story. In 2016, a consortium of 15 insurers and reinsurers (including (Allianz, Munich Re or Swiss Re) was formed to work on the blockchain. It led to the creation of B3i Services in 2018. Ten other market players then joined the project, including Axa.

In 2018 and 2019 B3i had carried out two fundraisers, for a total of around 23 million euros. The amount of a third round of funding, in 2020, was kept secret. Since then, the company has launched new fundraisers, which have ended in failure.

B3i was developing solutions to automate insurance processes with the blockchain, to make them more efficient, faster and profitable, particularly through smart contracts. Some technologies were also integrated into a product from Swiss Re and Allianz in April 2022.

“Maybe at some point someone will find the right formula”

Despite these successes, profitability was too far off. And the consortium preferred to surrender. “I think it was a quality job, but in the end we didn’t feel that the volumes and demand justified continuing to invest in this platform”said the chief financial officer of Swiss Re.

In order not to permanently nail the blockchain coffin in the insurance world, he added: “I think the concept remains very interesting for the sector. Maybe at some point someone will find the right formula. But for the moment, with this platform, we would not have found profitability ”.

Is it better to disappear to come back stronger? Is the blockchain preparing us for a return worthy of a Marvel villain? Why not … But for now, we wouldn’t bet our savings (especially if they’re in BitCoin) on it …

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