PriceWaterhouseCoopers (PwC), a provider of audit and assurance, tax and consulting services, has teamed with Z/Yen, a London-based commercial think-tank that promotes societal advancement through better finance and technology, to study the potential of blockchain technology in wholesale insurance.
The two companies will tap a range of insurers, re-insurers, and wholesale brokers to develop a view of distributed ledger technology’s potential benefits, Z/Yen noted in a press release. The project will include a global survey of the insurance industry.
Identifying Business Use Cases
The team will identify business use cases and design a roadmap for future developments. The study will assess current thinking and examine the potential for consortium research into standards for the insurance industry and taxonomies.
Working proof of concept prototypes and research will launch in July. A sponsor will work with Z/Yen to develop the report and a prototype proof-of-concept technology, utilizing the PwC’s new blockchain research laboratory in Belfast.
"With a new technology like blockchain, it's fundamental that you work in an agile way to prove that the technologies not only work, but provide the right solutions to specific business problems,” said Steve Webb, the PwC partner who leads the U.K.’s financial services blockchain practice.
“Businesses need to build, learn from mistakes, refine and improve. PwC's Belfast laboratory team are experts in this way of working and, by working alongside PwC insurance experts and the Z/Yen team, we are confident and excited that we will be able to unveil a working prototype alongside the written report," Webb said.
Tackling A Major Financial Sector
Wholesale insurance is a major financial sector that encompasses big commercial and governmental clients, agents, actuaries, brokers, underwriters, mutual managers, claims handlers, reinsurers and captives, PwC noted in a blog.
Blockchain technology has already been deployed in sharing economy insurance (e.g. SafeShare) and excess of loss reinsurance applications. The technology can also reduce manual effort and speed interactions between insurance parties.
Proof-of-concept demonstrations have shown the potential to do this in wholesale market deal rooms, in addition to small business, retail automotive, and home and contents policy placements.
PwC’s blockchain team includes fintech professionals with expertise in the delivery of insurance banking, e-commerce, and bitcoin services.
PwC noted that its Belfast facility is the largest group of blockchain specialists in PwC globally.
PwC Invests In Blockchain
PwC previously reported that blockchain technology marks the next “jump” in business process/optimization technology in a report titled, “Blurred lines: How FinTech is shaping Financial Services,” CCN reported in February. That report compared distributed ledger technology to Enterprise Resource Planning (ERP) software that allowed entities and functions within a business to optimize processes by sharing logic and data within the enterprise.
The report also noted that blockchain combines cryptographic, mathematical and economic principles to maintain a database of market participants without requiring a third party reconciliator or validator.
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