Automatic execution of contracts and sanctions, immutability and veracity of data, saving of time and money … On the surface, the blockchain seems to have been invented for insurance, but not everything is to be taken.
Traceability of intercompany flows
In 2021, the French insurer AXA through its subsidiary AXA Partners it collaborated with the developer of SaaS solutions Stratum around the project BlockCo with the dual ambition of improving internal collaboration and optimizing cash management. In the insurance sector, intercompany flows correspond to the circulation of an invoice between two entities of the same organization. In the case of an international structure, it is necessary to make sure that the VAT rate is the correct one for each invoice, but also to juggle the different information systems such as Excel, Oracle, Sharepoint … In 2020 AXA carried out an internal study which revealed that 66% of employees found the billing process lengthy and painful. The BlockCo project is based on the combination of an automation-based robotic solution, coupled with blockchain technology and implemented in the insurer’s management system.
Why did it work? The solution is a pleasure for the subsidiaries AXA Partners Holding, AXA Partners France and AXA Partners Belgium by automating 83% of the intercompany flow management process and reducing the time dedicated to these activities by 70%. Approximately 3,000 invoices and 400 million euros are processed each year through this tool.
Simplify the journey of containers from collection to storage, including customs validation … This is the challenge facing the software publisher IBM and the Danish carrier Maersk decided to confront. Their weapon? Tradelens. The private blockchain developed by IBM allows to offer APIs composed of an information storage module and an electronic validation system. Since insurers are connected directly to the network, they can check any information in real time. “When we talk about insurance fraud, we are referring to information that has been poorly circulated, has been poorly collected or is deliberately incorrect,” said Vincent Fournier, IBM’s blockchain leader. Circulating instantaneously verifiable data is therefore a good way to compensate for an incorrect declaration.
Why did it work? With a network of over 300 members including MSC, Seaboard and CMA CGM, Tradelens facilitates the monitoring of 65% of global maritime traffic. A success that requires other uses. In March 2022, the platform formalized the collaboration with Bolero, a BaaS company specializing in the digitization of transactions. The goal is to connect banks and insurance companies within the same network for greater control of financial flows.
Allianz, Munich Re, Deutsche Rück, Generali… In total there were 15 insurers and reinsurers to meet around the project B3i in October 2016 before being joined by a dozen other heavyweights including the Frenchman Covea. In March 2018 the consortium became a company. The project ? Build a platform to share data directly on the blockchain, initially focusing on contracts related to natural disasters and marine insurance. The purpose of the private network was to list the various actors involved, to facilitate the daily life of brokers and to promote seamless interoperability between all insurance businesses. In April 2022, Allianz and the reinsurer Swiss Re, for example, signed the first excess loss XS reinsurance contract on the platform.
Why didn’t it work? After an initial fundraising of $ 6.3 million when it was created in March 2018, the company renamed B3i Services concluded a second round of funding in February 2019. And then nothing … On July 28, 2022, the company has announced that it would go bankrupt following an inability to raise new funds. Swiss Re’s CFO completed this answer with the difficulty of coming up with a profitable formula.
Purchase and sale of UCIs
In 2017, the Sapin 2 law introduced the possibility of carrying out fund unit transactions directly on the blockchain. An opportunity seized by a handful of French management companies, that is OFI AM, Groupama AM, La Financière de l’Echiquier, Arkéa Investment Services, Lyxor and La Banque Postale. As of March 2019, blockchain IZNESdeveloped by fintech SaaS Stratum came into being. A step forward that brings with it the possibility of buying and selling fund units freeing themselves from the traditional infrastructure manned by Euroclear, one of the two securities depositories with Clearstream.
Why did it work? By bypassing the post-trade scheme that brings together transfer agents, banks and fund depositors, the IZNES blockchain has created a direct connection between buyers and sellers of funds. Faster and cheaper transactions are the main benefits for users of the solution. A dozen companies are active on the platform, amounting to 10 billion euros of assets under register, referenced and held on the private blockchain hosted by AWS, AZURE and OVH.
As of September 2017, AXA was proud to present his platform Sparkling which was selling as the first blockchain-based insurance launched by an industry flagship. This product, available on web and mobile, has made it possible to automatically and instantly compensate passengers on a delayed flight. Concretely, the smart contract has collected the information of each flight in real time through an oracle, these protocols that provide each blockchain with off-chain data. The policyholder did not need to send evidence to his company, which therefore did not have the resources (time or money) to devote to verifying and calculating the compensation.
Why didn’t it work? Two years after its launch, the project was discontinued. According to AXA, there are two elements at the origin of the failure: the lack of market propensity for this type of offer and the difficulty in finding the right distribution channels. The insurer specified that Fizzy did not achieve its commercial objectives and that the platform had registered 11,000 policies and provided compensation for a hundred travelers.
Termination of contracts
Entry into force on 1uh January 2015, the Hamon law gave any policyholder hired for more than a year the opportunity to change their car or home insurance contract. Two years later, 14 insurance companies supported by the start-up Stratum and consulting firm Deloitte have embarked on a blockchain initiative among insurers, led by a digital services company Above Steria. The basic objective was to streamline the sending and receiving of termination notifications through a decentralized ledger governed by the execution of smart contracts. A technological breakthrough that should have modernized time stamping mechanisms and compensated for traditional time-consuming termination processes.
Why didn’t it work? The main reason for this error lies in its use case. A project, even functional, that pushes the customer to go to the competition can only aspire to a short future.
State your situation, provide supporting documents, update yourself, update your experience, provide supporting documents and update yourself … The monthly routine of job seekers is not easy. In April 2020, AXA Partner and Stratumn collaborated with the Swedish public service Arbetsformedligen around the project Blockchain for unemployment. The stated ambition was to provide a blockchain-based infrastructure to simplify and automate unemployment benefit payments for around 400,000 Swedes.
Why did it work? Simplified declarations, reduction of the risk of data entry errors, reduction of the bureaucratic burden… Benefits which, however, oblige job seekers to authorize their public service to collect and use their data. Beyond an improvement in the NPS (net promoter score, ed) there is a new vision of compensation that appeals to interested parties.