An Italian Commercial Insurance Blockchain Pilot

Here at Insureblocks we love hearing about interesting real-life insurance blockchain pilots. So we were very excited to hear about the launch of Generali’s quotation process blockchain pilot. To learn more about this pilot we had the great pleasure of having Marco Boni, Group Head of Operational Excellence & Transformation at Generali, who is “genetically in love with technology”, join us for a chat on Insureblocks to take us through the journey they went through in building this Italian commercial insurance blockchain pilot.

2 Minute Definition of Blockchain

Instead of blockchain, Marco preferred to define what is DLT (distributed ledger technology). Small note to remember is that blockchain is a type of DLT. DLT is a technology that allows the storage of information in a distributed way. You can write on this distributed database, in an encrypted immutable way, after reaching a consensus amongst the participants. This technology enables you to increase the trust between all parties within an industry.

As the data is visible, agreed and secure, you can leverage smart contracts, self-executing codes, to automate business rules.

Challenges of the Italian commercial insurance ecosystem

Marco refers to the Italian commercial insurance ecosystem as “Spaghetti Insurance” as it isn’t that evolved. Therefore, the steps for the placement of commercial risk is done through manual activities. Back and forth information flow between carriers and brokers is done by phone and unstructured emails which complicates the matter when you have to draw up a policy based on this kind of unstructured information. This requires you to chase all the relevant parties to try and rebuild the entire negotiation, for the structure of the policy, that is perfectly in line with the needs of the client.

This is a very inefficient process which increases the risk of misalignment when structuring a policy.

Market perspective solution

Generali tackled those challenges by taking a market perspective and a market cooperation approach. They started from a business pain point that wasn’t connected to technology and realised that there existed problems that were shared at a market level.

They started by taking a market perspective approach by identifying the business pain points that were shared at a market level. This type of initiative and desire to solve those common problems together is within itself the biggest innovation they carried out over the last 2.5 years in the Italian market.

The initial founders of this initiative from the carrier side were Generali, AIG and UnipolSai with Zurich Italy recently joining the initiative. From the broker side the original founders were AON and Willis Tower Watson with Assiteca recently joining in.

 

Why was DLT selected over other more traditional technologies and what are the challenges with it?

Once the pain points had been identified in early 2016, the initial approach to resolving those problems was with traditional technologies such as centralised relational databases. However, with so many competitors sitting around the table it was quickly realised that such a solution wouldn’t be viable as it would require building a centralised infrastructure.