NEW YORK (Reuters) - A consortium aimed at developing ways blockchain can be used to improve processes in the insurance sector has added 10 new members as it prepares to test the emerging technology in a data-sharing experiment.
New members joining the Blockchain Insurance Industry Initiative (B3i) include Hannover Re, Assicurazioni Generali SpA, Ageas NV, Liberty Mutual and Japan Nipponkoa Insurance, the group said on Monday.
The consortium will test whether blockchain can improve the way that data is shared between reinsurance and insurance companies, a process that is still very cumbersome and manual, B3i said. The pilot project will involve transacting reinsurance contracts among the 15 member firms, the group added.
It expects to share the first results in June 2017.
B3i’s efforts come as the financial industry ramps up initiatives to use blockchain to simplify a wide range of processes such as the settlement of securities and international payments. While some have warned that the technology’s potential may be hyped, companies are hopeful that it can help them slash costs.
Blockchain, which first emerged as the system underpinning the cryptocurrency bitcoin, provides a shared record of transactions that is maintained by a network of computers, rather than a centralized authority. As changes to the shared record must be validated by each computer connected to the network, it creates a source of data that can reduce information discrepancies and the need for reconciliation.
“The Blockchain initiative is particularly important in insurance, where the secure and efficient exchange of information can benefit from disruptive technology that could eventually lead to game-changing applications,” Steve Hales, head of connected insurance at Generali, said in a statement.
Munich Re, the world’s larger reinsurer, led the consortium’s creation alongside competitor Swiss Re, the second-largest reinsurer, in October.
B3i is one of several collaborative initiatives by large companies aimed at advancing the development of blockchain technology. Earlier this month Cisco Systems Inc, Bosch Ltd and several large firms set up a consortium to work on using blockchain to secure and improve the “internet of things,” or the concept that everyday objects, from washing machines to shipping containers, will be connected to the internet and will be able to share data.
More than 70 banks work with R3 CEV, a startup that runs a consortium to develop blockchain technology for finance, while technology firms such as IBM Corp and Hitachi Ltd are part of a consortium led by the Linux Foundation.
Reporting by Anna Irrera; Editing by Dan Grebler