Podcasts about riskblock alliance

Tony chats about Insurance Innovation, Strategy, Careers and many other things with Chris Lowell, Insurance Strategist and Innovation Professional.Autonomous Vehicles:4 Part Self-Driving Cars series by Matt Perkins:https://insnerds.com/self-driving-cars-will-drive-better-than-humans-and-sooner-than-you-think/ https://insnerds.com/part-2-how-electric-vehicles-self-driving-cars-and-ride-share-go-hand-in-hand/ https://insnerds.com/part-3-self-driving-cars-the-next-five-years-2018-2022/ https://insnerds.com/part-4-why-self-driving-cars-will-be-adopted-quickly/ John Bachman’s article: https://insnerds.com/how-will-we-get-to-the-self-driving-future/ Blockchain: Pat Schmid podcast episode: http://www.buzzsprout.com/87086/670527-e67-patrick-schmid-vp-of-the-riskblock-alliance-developing-blockchain-for-the-insurance-ecosystem Riskblock Alliance: https://web.theinstitutes.org/riskstream-collaborative Books mentioned: Against the GodsInsuring TomorrowEnd of Insurance as We Know ItThe Future of Insurance Moving insurance past just being a financing mechanism and more of a risk manager. Innovation: When should we should innovate? PuttyInsurance.com AM Best Innovation Scores: https://www.youtube.com/watch?v=h-LDBSh2WC8

Dustin Helland is blockchain product strategy and implementation manager at State Farm. In this exciting episode he talks to us about the auto claims subrogation implementation on blockchain by State Farm and USAA. What is interesting about this implementation is that it was done on a Quorum blockchain, which is a first on Insureblocks.   What is blockchain? Blockchain is a distributed ledger, which enables members of a business network to execute transactions in a peer to peer fashion. Distributed ledger technology (DLT) essentially means that each of the network participants has a copy of the shared information. And by leveraging some complicated mathematical algorithms, the blockchain technology ensures that each of the participants can trust that the copy they have, or have access to, is the same as all the others. What this means is that when each of the participants can trust the information that they have, it allows them to perform business transactions in a peer to peer fashion. Rather than depending upon a third party or intermediary for validating that the information is actually correct.   Who is State Farm? State Farm was founded in 1922 by retired farmer and insurance salesman George Jacob "G.J." Mecherle. State Farm now insures more cars and homes than any other insurer in the United States while also providing a few other products such as life insurance, ifnanical services and a litany of others. As a mutual company, State Farms is focused on their policyholders and is currently ranked number 36 on the Fortune 500 list of largest companies.   State Farm’s blockchain journey State Farm’s blockchain journey started in late 2016 when Bitcoin started to get on the attention radar of financial institutions and other large enterprises. State Farm established a group in their labs department to explore and priorities blockchain opportunities. The team initially focused on working across the multiple business lines such as the claims department, underwriting and financial services. The objective was to educate them on the capabilities of the technology and identify and evaluate possible blockchain use cases that State Farm thought could be of value. In the spirit of learning by doing, they aligned a few of the identified business opportunities with some development teams to create early prototypes. Since then their work has evolved towards a focus on product delivery and realisation of business value. The current flagship project is the net subrogation product that they have built in collaboration with USAA (United Services Automobile Association).   Large consortium approach or co-founder one for blockchain? State Farm rapidly realised that blockchain is a team sport. For many of the blockchain use cases, to realise the potential of that use case requires a certain level of market adoption. The value is typically in the network. There are a couple of emerging patterns for driving blockchain solutions from concept through development and industry adoption. State Farm has invested and participated in each to really understand them. One of those models is the co-founder based approach that typically involves a small number of firms or companies that focus on developing a single product or use case. They build it out, prove it out and invite others to join in. The other model is the consortium approach such as RiskStream Collaborative (previously known as the RiskBlock Alliance) where you start off with a larger number of network participants, utilising this neutral third party to facilitate the collaboration, drive out product ideation, assist with product development, and then eventual implementation and support. The benefits of this type of approach is that it is mainly viewed by most as a more neutral environment for competitors to start working together. The neutral third party can facilitate conversations and the initial cost can be spread across multiple parties.

Patrick Schmid has a Phd in Economics and is the Vice President of RiskStream Collaborative (previously known as the RiskBlock Alliance). In this fascinating episode he provides an expert opinion and process for calculating ROI for blockchain applications. This is a must listen episode for anyone looking to develop blockchain solutions and need a functioning model to be able to calculate expected ROI.   What is blockchain? Patrick proposed two definitions: Formal definition Blockchain is a distributed ledger that maintains a constantly growing list of chronologically added records in the form of blocks. Within each block the data (e.g. transactional data or smart contracts) is confirmed and verified through this decentralised consensus process. This process removes the need for an intermediary to be involved in verifying and confirming transactions. Therefore, it establishes trust without the usage of a centralised authority. This is why, blockchain is often referenced at the trust machine. It is the decentralisation of trust where the data was once stored in one location and the trust was provided by one party. With blockchain the data is broadcast to all parties within network and the entire community is providing the consensus through the protocol itself. Informal definition Blockchain basically meshes the network with database/distributed database/ledger through encryption to provide advancements in ecommerce or transactions, or computing via smart contracts.   What is the Institute & how did its blockchain initiative start? The Institute is a 501c3 not-for-profit that was set up over a hundred years ago out of the Wharton School at the University of Pennsylvania. The Institute provides knowledge-based solutions with the goal to make the risk management, in the insurance industry, more efficient for industry participants and consumers. The Institute came across blockchain through their existing research when Patrick was leading their enterprise research whose goal was to provide some market insights and trends. Some of the early trends coming out of this research was that the insurance industry was going to continue to undergo employment changes. For example, careers in analytics were going to continue growing whilst traditional careers were expected to either remain stagnant or shrink. Patrick had developed an early personal interest in bitcoin, cryptocurrency and blockchain. In 2015 Patrick discovered smart contracts and R3’s emerging banking consortium. It became apparent that there was a need to develop a thought on blockchain for the insurance space. After some extensive research and discussions with numerous players in the space, Patrick made some recommendations to the senior management team to consider starting a blockchain insurance consortium in 2016. He felt that a not for profit would be perfectly suited to provide the network for the insurance industry. The Institute’s Board, which represents 40 – 50 CEOs that represent 60-70% of domestic insurance premium volume, reviewed the recommendations and supported them. Now RiskStream is not only doing this in the P&C industry but also expanding to Canada by working with LIMRAto start working on the life and annuities as well.   What is RiskStream Collaborative? RiskStream’s perspective is that DLT (distributed ledger technology) is network driven, whilst the technology is here to answer pain points that the insurance industry faces, they feel that a non-partisan arbiter is needed to bring the industry together to design, test, implement and ultimately adopt the technology. The RiskStream Collaborative was brought forth through the Institute and is designed to be that connector. RiskStream is a 501c6 not-for-profit. Its members lead every area of what they do. They have over 40 members from carriers, distributors, reinsurers and brokers. For example, members work with RiskStream staff to design use cases on behalf of the industry....

For this episode we were fortuitous to reconnect with Dante Disparte Founder and CEO of Risk Cooperative to look back on how blockchain has evolved in the insurance industry in 2018 and what we can expect for 2019.   What is blockchain? For the insurance industry, Dante describes blockchain as a bordereau or a ledger that exists simultaneously in an exact form across multiple distributed computer systems. From the outset this creates a level of resilience, a level of tamper proofing that you don’t get from existing technologies today.   Retrospective of blockchain in the insurance industry in 2018 “Still the beginning” “Still the beginning” is how Dante would characterise blockchain in the insurance industry. In spite of Bitcoin recently celebrating its 10thanniversary, it’s really only been in 2018 that we started seeing large scale enterprise tinkering with blockchain technology. In January 2018, Dante penned an article “One Thing Is Clear From Davos, Blockchain Is Out Of Beta” in Forbes, where he stated that at least 50% of the Fortune 500 were embarking in deep experimentation with blockchain. 2018 was the year of orientation, and Dante believes that 2019 will be the year of experimentation at scale. 2020 would see the much broader adoption of the technology across asset classes and across industries.   Consortiums and competitive advantage The most mature and evolved model in the insurance industry are the consortia at B3i and the RiskBlock Alliance. This model allows a risk averse industry, such as insurance, to understand the technology and follow their peers in getting basic POCs and use cases. Dante’s personal view of the world is that the consortia approach amounts to co-opetition which is tantamount to having Amazon partner with Walmart and JC Penny’s (For the UK: Tesco partner with Sainsbury, Asda and Lidl) in building ecommerce platforms. For Dante there is a genuine opportunity for insurers, brokers and others in this industry to leverage emerging technologies like blockchain and others to get a competitive advantage. Firms that really embrace those technologies, instead of limiting it to back end efficiency plays, will really take a lead over their competitors. In episode 23 “Blockchain from an Allianz perspective and lessons learnt”  Bob Crozier, Head of Global Blockchain Centre of Competence at Allianz. Pointed out that “B3i is not about getting a competitive advantage. It is for the industry and by the industry and its goal is to use blockchain to address industry pain points, help members reduce their cost base and make customers’ lives easier.” Whilst Dante agrees that there is value in such consortia his issue is that the strategic challenges the insurance industry faces require competitive dynamics than the consortia model doesn’t allow for. The average expense ratio is between $0.30 and $0.50 on every dollar of risk capital. If a firm tries to become more efficient to risk allocation and risk pricing but yet everybody in the insurance industry is following the same model in leveraging technology in exactly the same way, that firm’s potential net gain has been washed away.   Opportunities for Innovation – Insurwave Style Insurwave is a great example of opportunities for innovation that is triggered by the buy side of the market, especially when you are a Maersk with enough buying power and clout to force the insurance industry to innovate. You can hear more about Insureblocks from a Maersk perspective, EY perspective and insurance perspective.   Need for Digital Transformation “Where the internet was a disruptive technology in every sense of the word, blockchain is an augmenting technology” Blockchain isn’t meant to disrupt or displace the core function of the insurance industry, after all what is an insurance industry but a promise to pay. Blockchain is a technology that is here to amplify the trust. Maersk has a fortuitous balance sheet which in some wa...

This week’s episode is slightly different from the norm – it was recorded off the fly and in the moment as a fireside style discussion. Walid had the opportunity to speak to Timothy Dwyer and Michael Fulton from Nationwide. During this podcast, we get an overview of Nationwide,  discussed their perspective and lessons learnt on blockchain and its recent Proof of Insurance POC. First a little about our guests: Timothy Dwyer, Vice President & Assistant Treasurer to Nationwide, returns to our podcast to provide some further insight into blockchain from Nationwide’s perspective. Tim’s role at Nationwide covers banking, credit and debt finance. Michael Futon, Associate VP Technology Innovation, makes his debut appearance. Michael is the representative for Nationwide at the RiskBlock Alliance.   What is blockchain? Michael answers this question from an innovator’s perspective – Blockchain allows participants to do things differently – its key properties are its decentralised nature and immutability.   How important is immutability? Michael points out that it is difficult to find perfect use cases for blockchain. Walid posed an interesting question – wouldn’t tamper evidence in a system/solution be enough? Michael and Tim both agreed that in many use cases, it would be more practical to have a system that permits (but records) changes as mistakes are bound to happen! Although many use cases do not warrant the need for immutability, some specific cases such as asset transfer do require immutability (to prevent fraud and other forms of charge-back scams.) In some cases, reversibility may in fact be a desirable property – as referenced to during the discussion, in 2016, we saw the hack of the (first) DAO (‘DAO’ is an acronym for a ‘Decentralised Autonomous Organization’, recall that recently Hugh Karp from Nexus Mutual made an appearance on Insureblocks with a guest post– the Nexus Mutual is an example of a DAO.) Following the subsequent collapse of the DAO due to this hack, there was a hard fork on the Ethereum network – this split the network into ETH (Ethereum) and ETC (Ethereum Classic) – the hard fork represented a split in consensus - some parties wanted the DAO attack victims to be returned their money, but others did not. The DAO attack is an excellent example of the case where parties agree to “reverse” transactions on an otherwise immutable network. As our speakers point out, immutability and irreversibility need not be mutually exclusive – take the example of storing your books of accounts on the blockchain. The standard practice in the accounting profession is to never delete an incorrect transaction but to make a rectifying entry – the same idea may be applied to a blockchain – errors made may be corrected in subsequent blocks with a reference to the block containing incorrect/inaccurate information.   An introduction to Nationwide Nationwide is a leading P&C and Life insurance company based out of the USA, it prides itself on writing a highly diversified line of business.   Blockchain at Nationwide Timothy points out that the interest in blockchain stemmed from the lunch-time discussions surrounding cryptocurrencies in 2015. These discussions matured and lead to the formation of a monthly blockchain forum (which still runs today.) Michael and Timothy insist that Nationwide is still in the exploration/educational part of their journey with blockchain and they are actively observing how networks are developing.   DLT beyond blockchain The CEO of Hedera – the company behind the much-hyped hash-graph technology has delivered talks at Nationwide – the company is demonstrating willingness to explore DLT solutions beyond blockchain. Nationwide has observed that hash-graphs are able to handle a larger volume of transaction flow than blockchain currently and a potential POC using hash-graphs is in the pipeline! It is important to note that it is still early days for Distrib...

In this week’s podcast we will be discussing digital IDs onto the blockchain. We had the pleasure of having 2 guests in this episode. Daniel Faria, CEO of Nodalblock and Timothy Dwyer, VP and Assistant Treasurer at Nationwide Insurance. Daniel has had a career in cyber security and entrepreneurship. Timothy has spent a majority of his career in treasury and navigated into blockchain about 3 years ago by looking at the disruption it could bring to banking.   Blockchain in two minutes To explain blockchain in a non-technical manner, think about a traditional accounting firm that has one hundred book keepers. What if each of one of those one hundred book keepers had at the same time had to maintain a ledger saying exactly the same thing. Out of those hundred if more than 51 would say that a certain record is wrong, then all of the other ones would have to fix the book to maintain the record exactly the same way.   About Nodalblock Nodalblock is a blockchain cyber security company. The fastest FBI has stated that the fastest growing crime in the US is identity theft with one identity being stolen every 3 seconds! That’s 35,000 every day and more than 15 million every year. Nodalblock include digital IDs with multi factor authentication with a certification API that can be used to prove the authenticity of any digital file. A legal binding digital signature and and then an encrypted file transfer tool made available for a client’s IT systems via a regular API. Nodalblock essentially brings security to the blockchain.   About Nationwide Nationwide is a diversified insurance company offering life insurance, mutual funds, property and casualty. Nationwide has had a keen interest in blockchain, ever since it launched a proof of concept for “Proof of Insurance” with the RiskBlock Alliance (featured in this episode – An Introduction to the RiskBlock Alliance) at the end of 2017. Nationwide has been trying to determine if there was an opportunity for business disruption with blockchain technology on a stand-alone basis. They’re still trying to determine that and they still haven’t found a blockchain use case that will fundamentally change their business. They’re still continuing to look for that and consider themselves to be in education mode regarding blockchian. They have recognised the barriers to entry to blockchain, in the form of the network effect and in speed of transactions that can be pushed throught the network. Two points which they felt will be resolved in due course.   Digital ID As we all know we all leave comprehensive digital footprints wherever we transact on the internet. Whether it is on social media sites like Facebook or Twitter, financial transactions with Paypal and Apple Pay amongst others. We all must disclose personal and financial data to uses these services. This leads to our personal data being stored in various databases which we have little control over. How can digital IDs on the blockchain help to address this, especially in a world where our IDs get hacked with Equifax last year and Facebook last week? To answer that question businesses have to really ask themselves the question of the value they place in running KYCs and in keeping that information secure. Do they have the necessary processes in place, especially when considering that the biggest security problem is humans; employees in firms that get hacked due to a phishing attack. As public and private blockchains can interact between each other it gives large organisations such as insurance companies the strategic opportunity to open up part of their stored internal information (such as their customers digital IDs) to talk to a larger network (public blockchains) whilst maintaining the private sections secure, whilst leveraging the power of public blockchains. Nodalblock had an example of a recent piece of work they did for a large European insurance company whose GDPR,

Episode #116: Chuck talks with NAMIC's new chairman Henry R. Gibbel about his long family history in the mutual insurance industry. Plus, the final steps that could put the new Disaster Recovery Reform provisions on the President’s desk this week.

Welcome to the second episode of our News Flash series, where we share the latest developments in the blockchain space. For today’s episode we are excited to present returning speaker Christopher McDaniel, president of the RiskBlock Alliance. Chris will guide us through the release of Canopy 2.0, the new version of the RiskBlock Alliance’s blockchain framework, which will run on R3’s Corda Blockchain.   RiskBlock Alliance The RiskBlock Alliance, which featured in one of our previous episodes (An Introduction to The RiskBlock Alliance), is an industry-led consortium comprised of insurance carriers, brokers and reinsurers focused on delivering blockchain solutions to the insurance industry. What sets it apart from other insurance consortiums is the fact it’s a not-for-profit organisation sponsored by The Institutes, an educational organisation focusing on the property and casualty space that has been around for over a century. Since its founding last September, the RiskBlock Alliance has expanded significantly. It developed a relationship with LIMRA in the life annuity and retirement space and expects to expand in areas including group benefits and workers’ compensation.   The RiskBlock Alliance is built around three aspects. The consortium itself and its members, who are integral in ensuring the RiskBlock Alliance is for the industry and by the industry. Its blockchain framework, Canopy, a standardized set of blockchains that are reusable for many applications. Blockchain applications. The RiskBlock Alliance builds fifteen to twenty application on an annual basis on its Canopy framework.   Canopy Before Canopy each company had to create its own blockchain for its applications. If a company decided to build a blockchain application utilising policy information, they created a policy blockchain. Then, if a different company built another application requiring policy information, they had to build a similar blockchain from scratch. The RiskBlock Alliance’s solution to this is Canopy, a framework that makes it easier for companies to experiment with blockchain and create their own solutions. It provides a set of reusable blockchains, such as a policy or a claims blockchain, along with numerous applications that work on these standardized blockchains.   Canopy 2.0 Canopy 2.0 will be released in early September, along with a blockchain application for proof of insurance and one for first notice of loss in claims. It aims to become the framework that connects all blockchain applications together.   1. Universal framework Canopy 2.0 will be the first universal version of Canopy. While the RiskBlock Alliance will continue building its own applications, Canopy 2.0 will be an open framework others can build upon. It will have the tools and components to allow others to cooperate with the RiskBlock Alliance and improve the framework by creating applications and expanding the framework itself. In that way Canopy 2.0 can grow beyond the areas it is currently focused on, making it the first true end-to-end blockchain insurance platform.   2. Back office connectivity At the moment a lot of blockchain solutions ignore the problem of connecting back office systems with the blockchain, leading to a gap between blockchain applications and back office data. Canopy 2.0 solves that with its ability to create APIs to connect back office systems with the blockchain. This connectivity does not just make loading data onto the blockchain easier, it also allows members of the consortium to create more flexible use cases. Chris points out that blockchain is not meant to be used as a data warehouse and it is neither easy nor sensible to put every piece of data onto the blockchain. Through these APIs, members will be able to selectively combine data from the blockchain with data from their back office systems in their applications, thereby creating more flexible use cases for all blockchain appl...

Today’s episode takes us to New York with Bill Pieroni, President and CEO of ACORD, the global data standard setting body for blockchain in the insurance and related financial services industry. Bill shares his perspective about the importance of the uniform data standard provided by ACORD and the value of investing in blockchain and new technologies.   Blockchain in two minutes A blockchain is a digitized, decentralized ledger of transactions. The first step is a transaction request, such as a claim, contract or endorsement. This request goes over a peer-to-peer network and, after its validity is verified through cryptographic algorithms, it is combined into a new data block which is added to an existing blockchain, thereby completing the transaction. In insurance, the peer-to-peer network can be comprised of insurers, reinsurers, brokers, independent agents, regulators or anyone with a vested interest in the insurance industry.   ACORD ACORD is the global standard setting body in the insurance industry. It aims to bring together various stakeholders for whom collaborating would otherwise be difficult, either because they are competitors or because they lack the necessary infrastructure. For over forty years ACORD has been providing the infrastructure, facilitation and expertise to enable fast and accurate data interchange by creating electronic standards, standardised forms, taxonomies and tools. It boasts over 8,000 global members, with one third of all global premiums leveraging ACORD standards covering brokers, agents, carriers, reinsurers and solution providers.     With new technologies such as blockchain, IoT and usage-based insurance, data standards have become more important than ever. Investing in innovation runs a risk of becoming a one-off investment due to an inability to effectively leverage the technology. By setting a common data standard across the industry, ACORD helps lower the cost, risk and time associated with investing in innovation.     ACORD and blockchain A great aspect of blockchain is that it requires a level of cooperation which brings together the stakeholders in the insurance industry. Operational efficiency is blockchain’s most popular feature. However, Bill reminds us of blockchain’s potential to enable the development of superior value propositions. Talented individuals across the insurance industry can work together to focus on meaningful differentiation rather than just thinking how to compete on price based on a specific set of data. Following a proprietary approach to data standards would be a mistake. It would create barriers in the industry by limiting a product’s uptake and the the availability of vendors to develop innovative solutions. Having a common data standard is therefore critical. It reduces risk and makes it easier for existing legacy platforms to adapt to blockchain. A common data standard does not only create a tactical advantage, ie cost reduction, it creates a strategic advantage as well. ACORD standards leverage much of the work done in the insurance industry in the past decades and share that with ACORD’s global network. ACORD is involved in most, if not all, blockchain initiatives globally, either by helping develop their data standards or by directly leveraging ACORD standards as part of the initiative. Here at Insureblocks we have seen quite a few of these initiatives. Insurwave, B3i and R3’s Corda blockchain all utilise ACORD standards. ACORD is also working with different digital network operators, including B3i and the RiskBlock Alliance, to create a smart contract standard on how data is processed, a key step in allowing interoperability between different networks. Finally, ACORD is working with Ethereum and IBM’s Hyperledger Fabric as it seeks to set a uniform data standard across blockchains.   Data in the insurance industry Data is the lifeblood of the insurance industry,

RiskBlock Alliance This week’s Insureblock’s episode takes us to Pennsylvania, USA, where we had the chance to interview Christopher McDaniel,  President of the RiskBlock Alliance; an industry-led consortium that collaborates to unlock the potential of blockchain across the insurance industry.   2 Minute Definition of Blockchain For Chris, there are three fundamentals to blockchain: Ubiquitous data – all data is synchronised between the participants behind the scenes. Immutable – data cannot be erased. It is a perfect audit trail with a one source of truce for the participants using the blockchain. Smart contracts – the capability of saying if a situation exists do something on the blockchain. It is a way of automating different processes that may exist on the blockchain.   What is the RiskBlock Alliance The Institute is an organisation that has been around for a hundred years in the property and casualty space. It provides education and research in that space. 18 months ago, the board of the Institute tasked the RiskBlock Alliances with: Proof of concept - could blockchain be used in the insurance space Proof of collaboration - can we get competing firms to work together around a common goal By June 2017, four proof of concepts were set up with over 40 insurance entities collaborating together, leading to the formation of the RiskBlock Alliance. In Chris’ opinion, one of the smartest things that the RiskBlock Alliance did was instead of jumping into the deep end of the pool was taking 12 weeks to really define what the RiskBlock Alliance was going to be and what value it will bring to its members. They created a consortium of insurance carriers, reinsurance and brokers to build a blockchain framework with multiple use cases on top of it. The framework is really key, as it is the first truly enterprise friendly reusable blockchain framework.   Why use blockchain? Prior to the RiskBlock Alliance one of the Institute’s members built a Proof of Concept for a compelling need in the insurance industry and tried to get the rest of their peers / competitors to join in. They received a lot of pushback from their competitors. RiskBlock being an independent trusted source was able to bring that exact same solution with the participation of all its members in the roll out of that particular use case. Blockchain is a “team sport”. If you are doing something that is individual to your organisation there are more likely better solutions out there than blockchain. However if you are looking to join together different entities and competitors and want to have them share information in an ubiquitous, secure and real time manner, then blockchain is the best solution for that.   Getting competing entities to work together Everyone seems to think that they have the secret sauce. In one example of a use case need around subrogation – the process between 2 insurance firms who are involved in an auto accident (for example) with a need to negotiate a final financial settlement. Arbitration may be involved and it’s a very painful manual process. By creating a blockchain solution you can automate that process and create efficiencies for all parties. Effectively the way to getting competitors to work together is by ensuring that the value they get is greater than their competitive fears.   Building a truly digital process 80% of blockchain use case are in the efficiency area. 20% is in new products, new channels, new ways of doing things. Most of the low hanging fruits is around those efficiency gains. With efficiency gains comes process improvement needs. To maximise on the full efficiency gains of blockchain, insurance companies also need to ensure that not only do they input data onto the blockchain but that their back end systems are upgraded from a manual to automated ones.   How does the RiskBlock Alliance compare to other consortiums like R3 and B3i?

Episode #105: Chuck talks with IIHS President David Harkey about the organization’s distracted driving research. Plus, easing the pain with blockchain. How this new technology can make the claims experience less burdensome for insurers and their policyholders. And commercial drone use takes a step forward as the House approves a five-year FAA reauthorization bill.

The emerging distributed ledger software technology Blockchain, being developed for use in financial transactions, has applications in how we manage insurance information, too.  It could one day be used to reduce Florida's nearly 27% rate of uninsured drivers – the highest in the nation – while providing added convenience and money-saving efficiencies to both consumers and insurance companies.  Blockchain technology is also touted as an answer to the current climate of data breaches and compromised personal information.Host Lisa Miller, a former deputy insurance commissioner, talks with the leader of the insurance consortium applying Blockchain and a Florida State Senator who calls it the next wave in the insurance space, especially when it comes to fighting growing insurance fraud.  Guests on the podcast are Christopher McDaniel, Executive Director of the RiskBlock Alliance and Senator Jeff Brandes (R-Pinellas County) who discuss what exactly Blockchain is and isn't, how it's currently being used,  and the rapid growth opportunities this new technology represents.Show Notes:Blockchain is a new technology that is changing how we manage insurance information.  Blockchain is a distributed ledger software that uses a continuously growing list of records – known as blocks – that don't rely on a centralized third-party vendor to administer.  Instead, each party to a financial or other transaction is networked and has the original and updated versions of the transaction, which is contained on many different and anonymous blocks.   By its design, it's advertised as being highly resistant to any data modification by any single participant, once recorded.Christopher McDaniel of the RiskBlock Alliance said that Blockchain unfortunately has been made out to be very complicated and that it really isn't, despite lots of jargon that has confused both consumers and the insurance industry.  And while Bitcoin also uses Blockchain technology for public currency exchange, he said there is no connection between the crypto-currency and the RiskBlock Alliance efforts.“What Blockchain really brings first and foremost to the table is that the concept of transactions can go away.  Transactions being anything between two parties, whether that's the consumer and their insurance agent or whether it's the agent and the insurance carrier,” said McDaniel on the podcast.  “If you have a blockchain solution in place, everybody has ubiquitous instant access to that information.”  In addition to the information being made into an un-erasable permanent record, McDaniel said Blockchain is capable of using “Smart Contracts”, which use an “if-then” logic protocol to automate activities, saving time and cutting out middlemen.While Blockchain applications are still very new to the insurance industry, there are applications underway right now.  Nationwide Insurance just implemented Blockchain for proof of insurance, simplifying verification of automobile insurance coverage in real time and eliminating the need for paper ID cards.  McDaniel pointed out that right now, neither party in an auto accident really knows the other person has auto insurance.  They have paper insurance cards that say they do, but that insurance may have since been cancelled, prior to the accident.“Basically inside the mobile phone app is a plug-in, so that the two people involved in the accident can basically tap their phones together and in a matter of seconds it goes out to the Blockchain and it comes back down and says the other person has insurance and how much coverage they have,” explained McDaniel.Florida tops the nation in the number of uninsured drivers on its roadways.  The Insurance Research Council (IRC) says 26.7% of Florida drivers drive without auto insurance, according to its latest study based on 2015 data.  The insurance industry puts the average cost of an uninsured motorist claim at about $20,000, excluding any vehicle damage. The RiskBlock Alliance, which is part of The Institutes, an industry educational and research organization, has developed 30 different uses for Blockchain technology in managing insurance information.  The 23 companies currently involved in the Alliance include Nationwide, USAA, and Geico.  McDaniel said the number is expected to grow to nearly 60 companies by year end.  Florida State Senator Jeff Brandes (R-Pinellas County) is a believer in Blockchain's potential, especially in the Sunshine State, and has been urging greater awareness of the technology among his fellow legislators.  “My sense is that this is the next wave in the insurance space for transactions and they (legislators) need to be able to understand and begin to find and contemplate some of the opportunities that come along with this new technology,” he shared with host Lisa Miller and McDaniel.    Brandes and McDaniel agreed that Blockchain's proof of insurance capability could be expanded to proof of driver licenses, which would assist law enforcement and Florida's Division of Highway Safety and Motor Vehicles to identify people who shouldn't be driving.  Brandes said that seems like an area where some legislative authority would be required to pursue.“One of the big opportunities that Blockchain brings is the ability to reduce fraud.  To the extent that we can have all the other services and reduce fraud, I think you're going to see a variety of businesses begin to use it.  Many of them won't even know they're using Blockchain technology – it'll just be the new way to do business,” said Senator Brandes.  Not only are insurance companies starting to use Blockchain, but they're introducing it to their policyholders' businesses, too.   McDaniel's pointed to two sectors – energy and trucking transportation – as examples. “All the pieces and parts that they have need to be insured.  We're bringing efficiencies to them through the Blockchain.  A version of our proof of insurance solution for commercial trucking is reducing the current 30-minute manual process at depots…down to less than 30-seconds to prove insurance coverage.  That one check, with just one trucking logistics company, happens 200,000 times a day,” McDaniel said. “I think the exciting thing is that we're seeing rapid adoption of this technology, largely because it drives value for insurers,” added Senator Brandes.  “These insurance companies are very focused on reducing fraud.  Obviously they see that as a negative piece to their rate base and so the opportunity for them to speed along transactions, close things out quickly, and the idea of automatic transactions, I think really appeals to them and all are strong reasons why you're seeing large insurers begin to make this shift over.  And I think over time, that's only going to continue.”  Blockchain provides a unique set of data from which you can then apply analytics to ferret out fraud right from the beginning and put a stop to it in a more comprehensive way than previously available.  The other big consumer benefit to Blockchain technology is data security for its users.  McDaniel said the RiskBlock Alliance is looking closely at adopting the GDPR Rule, a European standard on information privacy and ownership, anticipating it will one day be the rule in the United States.  “Everybody's seen all the stuff in the news lately about Facebook.  It really centers around the customer's safety of their data, their right to control their data, and the right to be forgotten.  We're going to that level here right from the beginning in what we've built,” McDaniel said.  On the podcast, McDaniel also shares the RiskBlock Alliance's efforts to partner with the B3i, a European effort on the use of Blockchain technology in reinsurance.Host Lisa Miller noted that Blockchain represents an opportunity to bring insurance innovators together with public policy innovators to collaborate on creating new and better insurance products and services for the marketplace.  And what better place to do so than here in Florida?  She said that Blockchain could also help regulate our new medical marijuana industry here in Florida.  “There are exciting times indeed to look at technology that can help us work smarter – not harder – while providing enhanced consumer value and protection,” said Miller. Links and Resources Mentioned in This Episode:  RiskBlock Alliance Webpage (https://www.theinstitutes.org/guide/riskblock) RiskBlock Alliance – Blockchain: The Link to Success (http://lisamillerassociates.com/wp-content/uploads/2018/04/Introductory-Brochure-with-Use-Cases_FINAL.pdf)  Senator Jeff Brandes Legislative Webpage (http://flsenate.gov/Senators/s24) Blockchain could ‘revolutionize' insurance  (from Business Insurance 3/16/18) (http://www.businessinsurance.com/article/20180316/NEWS06/912319906/Blockchain-could-revolutionize-insurance) ** The Listener Call-In Line for your recorded questions and comments to air in future episodes is 850-388-8002 or you may send email to LisaMiller@LisaMillerAssociates.com **The Florida Insurance Roundup from Lisa Miller & Associates, brings you the latest developments in Property & Casualty, Healthcare, Workers' Compensation, and Surplus Lines insurance from around the Sunshine State.  Based in the state capital of Tallahassee, Lisa Miller & Associates provides its clients with focused, intelligent, and cost conscious solutions to their business development, government consulting, and public relations needs.  On the web at www.LisaMillerAssociates.com or call 850-222-1041.  Your questions, comments, and suggestions are welcome! Date of Recording 4/13/18. Email via info@LisaMillerAssociates.com   Composer: www.TeleDirections.com

Out of all the insurtech ideas sprouting in the market, I have yet to see anything that has the potential that blockchain has. In this episode of Profiles in Risk, I spoke with Patrick Schmid of The Institutes' RiskBlock Alliance. Patrick is working with the insurance ecosystem to help them co-develop the blockchain platforms and technologies necessary for insurance to blossom in the next wave of innovation. HOW TO CONNECT WITH PATRICK SCHMID:LinkedInRiskBlock SiteEmail MENTIONED IN THE PODCAST:EthereumGDPR RegulationsHyperLedgerB3iR3 PRODUCTIVITY:SlackConfluenceGitHubTwitter BOOKS:The Rationale of Central Banking by Vera SmithIshmael: A Novel by Daniel QuinnMan's Search For Meaning by Viktor Frankl

Innovator's Edge CEO Wayne Allen interviews Christopher McDaniel, Executive Director of the RiskBlock Alliance, on how it is developing blockchain solutions for the insurance industry.