ChainThat, a UK-based firm that offers blockchain solutions for the re/insurance industry, has unveiled Distributed Ledger Technology (DLT) driven risk and capital exchange in Bermuda.
The blockchain- driven exchange is scheduled to go live with a production trial in July this year.
The setup, known as the Bermuda Insurance Exchange, will allow broker, reinsurance and insurance firm to gain access of the capital markets using blockchain.
Additionally, it will facilitate transfer of risk and capital between direct insureds, brokers, cedants and captive insurers and insurance, reinsurance, industry loss warranties (ILW) and insurance-linked securities (ILS) using blockchain.
ChainThat CEO David Edwards said: “We are delighted to be unveiling this exchange that will cut frictional costs and allow brokers, reinsurance and insurance companies access to the capital markets using blockchain.
“This is an opportunity for Bermuda to establish itself as the most advanced insurance market in the world.”
At the outset, the exchange will offer the framework for a traditional reinsurance market, including placement, accounting, settlement and claims.
The next stage will be to launch new supporting the same processes for ILS.
Subsequently, ChainThat will introduce the capability to support securities and warranties and provide trading of these instruments.
ChainThat business development director Rebecca Oliver said: “The exchange will enable the existing market participant businesses, brokers and risk carriers, to develop and market new competitive products and extend their distribution reach like never before.
“Cost control and innovation are the two big issues that are being discussed in insurance board rooms around the world.
“By automating the current operational framework, we believe the Bermuda Insurance Exchange provides the insurance and reinsurance market with the opportunity to both maintain margins while reducing pricing to the insured. In turn, this will increase business performance and global competitiveness.”
Afer Bermuda, ChainThat plans to launch the exchange to other insurance markets across the globe.