A plan to modernise the London Market – the major international insurance market based in the United Kingdom's capital – may include recommendations to use blockchain technology to improve data access and reduce costs associated with administrative paperwork.
Lloyd's, one of the London Market's key participants, held a seminar in London last week to highlight blockchains, among other technologies, to insurance market participants as part of their modernisation plan, called the Target Operating Model, or TOM.
Blockchains could bring increased risk-recording abilities, transparency, accuracy and speed to the insurance markets, Lloyd's director of operations, Shirine Khoury-Haq told CoinDesk in a statement.
Khoury-Haq elaborated on the insurance market's interest in blockchains:
"Blockchain has the potential to improve the way insurers record risk, increasing the speed, accuracy and transparency of our processes. As part of the TOM consultation we will be interested to see how blockchain could help us resolve some of the challenges facing our industry.”
The two blockchain use-cases floated at the seminar were for blockchain-powered digital 'deal rooms', where documents can be securely shared and logged, and a new token on a permissioned ledger for insurance markets. The ideas were presented by Michael Mainelli, an emeritus professor at Gresham College and executive chairman of Z/Yen, a think-tank and venture capital firm.
Blockchain-powered deal-rooms
Mainelli said online digital deal-rooms could significantly change the way business is currently done in the London Market. While such technology already exists, few market participants make use of it.
Instead, they rely on physical proximity to one another, personal relationships and paper documents to get deals done, he said.
"Everyone [in the market] works within three minutes of Lloyds, but they also know they're dirt if they renege on a contract. Within hours everyone will freeze them out," Mainelli added.
But an online deal-room using a blockchain could make the London Market more attractive to international business, which could drive significant growth for Lloyd's and the London Market, he pointed out.
"If we were sitting in Hong Kong right now and decided to create a global insurance market, we could build a quick deal-room and we would automate it from the start," added Mainelli.
A blockchain-based deal-room would strip out the need to trust an intermediary while providing an accurate record of the documents shared by the deal's participants.
"It gives you a database that's unalterable and nobody owns. It's a ledger of who sent what to whom, when, forever. That's an important part [of the insurance process]," Mainelli said.
via www.coindesk.com
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