China Re, Hannover Re, General Reinsurance Corporation and Zhong An have announced plans to establish a joint reinsurance blockchain platform.
Apart from the efficiency benefits of blockchain, the parties outlined two reasons for the development.
Firstly, insurers have complete information, but the reinsurer has very limited data about transactions. Secondly, the limited transactional data available to reinsurers results in operational risk for them, a report said.
The net effect is reinsurers lack confidence in the information they have, hence they charge more. As a result, this limits the take up of reinsurance in China.
By using blockchain, reinsurers can gain visibility into insurers’ transactions.
China Re Group and ZhongAn Technology have completed a proof of concept (PoC) with other partners already. This helped them verify the feasibility and benefits of a blockchain reinsurance platform. The PoC sounded unusually wide-ranging, covering negotiation and contracting, reinsurance, document exchange, claims processing, and integration into a multi-chain trading ecosystem. The Shanghai bureau of the CBIRC is leading the project.