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Blockchain is one of many new emerging technologies alongside AI, machine learning, robotics and much more. Most insurance companies unfortunately look at these technologies in silos and thus get a limited return on their investment. BlockClaim is an exciting insurtech that had the foresight to design an offering that combines both AI, machine learning and blockchain. In this exciting podcast we had the pleasure of interviewing Niels Thoné, CEO of BlockClaim, who passionately shared his insights on the convergence of AI, machine learning and blockchain.

 

What is blockchain?

On a high level blockchain is all about storing and processing sensitive information, like financial transactions, on a lot of different computers rather than with a single central authority. What this means is that the need for trust in a central authority is removed because if it fails the network doesn’t fail. For BlockClaim, a private blockchain is a great way to connect various actors with different systems, software or legacy IT in a super light touch way. It allows BlockClaim to gather information from all these different systems in real time without interfering any kind of workflows.

Blockchain creates a unified data format that allows you to feed that into any AI or machine learning and increase its efficiency through the use of smart contracts for automation of workflows or processes of claims for example.

 

The new stack

Here at Insureblocks we are great believers that the future resides in looking at emerging technologies such as blockchain, AI, machine learning, IoT, big data, and robotics as the “new stack”. Because it is only by combining them that we can really get the most ROI out of them. We asked Niels his thoughts on how the insurance industry was embracing these new technologies.

Insurers have a tendency of looking at these new technologies in a “trendy way”. Five, six years ago it was RPA, then it became AI and machine leaning and last year it was blockchain. A lot of insurers have a tendency of just following the latest technology trends which complicates things.

However Niels is quick to point out that sometimes you meet a C Level director that gets it and sees the value of combining these new technologies to help them achieve their vision. He gave the example of a CEO of a bank insurer who stated her vision of settling claims in one day and wanted to find out what set of technologies would help her achieve that vision.

Innovation department at insurance companies are also a great way for start-ups to have that first conversation. However these innovation departments are more like gatekeepers who do put you in touch with different sections of the business but they don’t have any budget or any kind of decisive authority.

 

Data – the new natural resource

In episode 40, IBM’s 2019 Insurance Predictions, we interviewed Sandip Patel, global managing director for insurance across IBM. In podcast he stated that there is a fundamental shift in how we think of data. Where data is becoming the next natural resource, particularly in Insurance from a few perspective:

* Volume of data: The rate and pace at which data sets are evolving is growing exponentially.

* Type of data: the nature of data is changing. 60 – 70% of the data sets such as from wearables, sensors, and drones, often referred as unstructured data sets

* Temporal factor of data

Data basically enables BlockClaim to make informed decis...

For this week’s podcast we continue into our theme at looking at new technologies that constitute the “New Stack”. Dessa is a company that specialises in offering artificial intelligence solutions to enterprises. We had the pleasure of having Paul Brikis, insurance lead at Dessa shares his thoughts on AI & Blockchain.

 

What is blockchain?

To define what is blockchain, or even just to conceptualist it, Paul played a little game with Walid.

Paul: Let’s pretend that we’re going to assign my phone a store value and possession determines ownership. Let’s imagine there are no other phones in the room and I’m holding the phone. If I ask you, Walid, who owns the phone, what would you say.

Walid: I would say you own it.

Paul: Exactly there's none other ones in the room. You know it's very easy to see that ownership is mine. So, let's pretend I pass the phone over to you and let's ask the same question who owns the phone.

Walid: Well technically I would say it's still you as you just passed it over.

Paul:Sure, but it's in your hands like you know you feel confident that you're holding that phone. So, we can see that the transfer of physical goods is very easy to transfer ownership. But let's play the same game, but this time let's change the rules where I'm going to take a photo of my phone and say that photo is redeemable for the phone in the picture and now let's assume that I email you that photo. Do you still believe you own that phone?

Walid:I may own the phone, but you may have sent the phone to somebody else.

Paul:Exactly, digitally things are easily reproducible. When we are transacting digitally it's hard to create trust of ownership. This has been called by economists as the double spend problem. In that in physical goods there's no way to know it's been spent twice, but in a digital world that’s really hard. The way to combat this is to establish all forms of  intermediaries, so we trust that when we own these things that people say we own. You need a third party to validate that. Where blockchain is this revolutionary idea where suddenly we can transact with parties we don't necessarily need to trust, but have confidence that we're getting what the other party says we're supposed to be getting.

 

What is Dessa?

Dessa’s mission is to help large enterprises scale AI. They strongly believe that AI is a transformative technology that companies are going to need a lot more of in the future. The company is made of two parts:

* A truly world-class AI team

* A team of former MBB (McKinsey, BCG, Bain) consultants who specialise in helping large enterprises identify business problems and opportunities that AI can address

Dessa works in a highly regulated industries such as Telco’s, banks, investment firms, credit cards and insurance.

 

What is artificial intelligence (AI)?

For Paul, the reason why blockchain got on the map was thanks to Bitcoin. AI got onto the map thanks to a contest in 2012 called ImageNet. ImageNet is like the Olympics of computer science challenges. In this particular challenge, computers were tasked to classify five million images.

The team from the University of Toronto combined very powerful computers with a technique called deep learning and they won the competition. This event is seen as a sort of the advent of when AI became topical. All three of those team members were recruited by Google and that when they became an AI first company.

Susan Joseph has been working in the blockchain area for the past 4 – 5 years. As a lawyer she has consulted with the insurance industry and most recently was the North American representative for B3i, the blockchain for insurance consortium.

In this podcast we discuss two of Susan’s passion: “Innovation and diversity in the insurance industry”.

 

What is blockchain?

Blockchain is a foundational technology that provides a highly flexible set of tools allowing businesses, governments and others to re-examine their commercial relationships. It brings opportunities for greatly enhanced efficiency and development of new products. Inherent in the technology is the ability for diverse parties to cooperate in a way where trust is brought about through cryptography or promoting diversity through the development of the technology in the belief that the widest spectrum of perspectives will foster the most valuable innovations.

On a more technical side it is an additional communication layer on the internet / web 3.0. It's based on advanced cryptography, computing and game theory. Susan likes to refer to it as a distributed value technology and for her it presents the next step in the digitization of data - both communications and assets, while the data is created transferred and stored. It has wide-ranging implications for commerce, society and behaviour.

 

Is the insurance industry good at embracing innovation and diversity?

In Susan’s point of view, no the insurance industry isn’t particularly good at embracing innovation and diversity but that isn’t too different to a lot of industries though. Innovation, in the insurance industry, is highly regulated and particularly in the United States where you have 50 state regulations in addition to some federal ones.

Systemically it’s hard to set up innovation in this space and yet you see a demand for digital projects and easier access to products and different kinds of products. Innovation has to happen, or the industry just isn't offering what the market wants.

With regard to diversity that's a problem with every industry - services, technology and insurance. When you look at cutting-edge technology, Susan believes it's even worse. The amount of diversity in a cutting-edge area that just isn’t there. Susan think it is really interesting in that in this technology, such as blockchain, which is intended to democratise, that we need to have this diversity of thought and diversity of voices.

it's not, there's not a full-throated diversity effort let's just put it that way and I think it's really interesting in this technology which is intended to democratize, the more diverse thought and diverse voices in there that needs to happen. Because that's a population that we want to serve.

Diversity is diversity in terms of gender, types of voices, cultural and a lot more. It is an inclusion play. Plenty of studies have shown boars with three or more women really start to affect the culture and change and increased profitability. A set of diverse voices and thoughts will improve the innovation side of any company. It’s really hard to innovate in an echo chamber.

 

In a study by McKinsey in 2017– “Companies with more culturally and ethnically diverse executive teams were 33% more likely to see better-than-average profits.“

 

AM Best – Scoring and assessing innovation

Trade associations play a leading role in educating the business community on the opportunities of blockchain. In this podcast we had the pleasure of interviewing Patrick South, Vice President of Development at the Digital Chamber of Commerce in Washington D.C. The Chamber of Digital Commerce is the world’s leading trade association representing the digital asset and blockchain industry.

 

What is blockchain?

Blockchain is a combinatorial innovation. Think of it like a Lego bucket in which people are pulling existing Lego pieces and piecing them together in new innovative ways. Blockchain is leveraging existing proven technologies such as linked lists, asymmetric key parenting and hash functions in new and innovative ways.

Blockchain is a distributed ledger is a distributed ledger that records and maintains data in a manner that allows multiple stakeholders to securely share access to the same information in digital aspects.

In today's environment we have all these disparate databases that require constant reconciliation and messaging. A lot of existing technology is simply applying digital overlays to analog processes. What blockchain offers is the true business transformation. Instead of having to reconcile siloed databases, blockchain creates a single source of truth that enables all parties to operate from of that mutualised data store.

 

What is the Digital Chamber of Commerce?

The Digital Chamber of Commerce is a 501(c)(6) trade association whose mission is to promote the acceptance and use of digital assets and blockchain based technologies. Through education, advocacy and working closely with policymakers, regulatory agencies and industry, their goal is to develop an environment that fosters innovation, jobs and investment.

They are made up of over 200 members:

* 60% are startups varying from blockchain platforms to cryptocurrency exchanges to ones operating in the security token space

* 40% are composed of large financial institutions, consultancies, service providers, law firms, accounting and advisory firms

The Chamber has five working groups to promote the acceptance and use of digital assets and blockchain based technologies:

* Token alliance:which is co-chaired by the former SEC commissioner Paul Atkins and former CFTC chairman James Newsome. Last year this working group wrote a white a paper on what constitutes a non-security or utility token entitled – “Introducing: Understanding Digital Tokens: Market Overviews and Proposed Guidelines for Policymakers and Practitioners”

* Smart contracts alliance: which focuses on the existing legal framework and how smart contracts can be used to enforce that. This working group has a white paper entitled: “Legislator’s Toolkit for Blockchain Technology” and “Smart Contracts: Is the Law Ready?”

* Digital asset accounting consortium: as there are no accounting standings in the digital asset space. Developing accounting and reporting standards for digital assets and blockchain-based technologies.

* Blockchain in...

For this week podcast we continue our theme on how to build effective governance solutions in a blockchain ecosystem. This time we had the pleasure of having Mance Harmon, CEO of Hedera join us to share his insights on how to build effective governance.

 

What is blockchain?

At a very high level, blockchain is an evolution of database technology. In traditional database technology you can have a multi master database solution, which is essentially like having multiple copies of a same master database. It’s a replicated database with identical information in every instance. As users connect to these master databases to make updates to them you sometimes have what is called a write conflict. Meaning that the collection of all these databases need to come to an agreement on which one of those master databases was modified first. The assumption has always been that one organisation would manage all of those master databases. Whilst that may be fine in some scenario it doesn’t quite work in one where for example you’d ask Amazon to take one of its masters from its multi master database solution and give it to Google to run and administer.

What blockchain initially provided was for the first time the ability to take this multi master database solution and give away the masters to different legal entities, different organizations and do so securely. The 1st generation of blockchains, Bitcoin being an example of them, uses a very linear process. Each node in the network has a local copy of this chain and as new blocks get published the community decides which blocks to put on top of the chain and what order and everyone does that in this sort of linear fashion. For Mance this isn’t very efficient.

 

Difference between Hashgraph and Blockchain?

Hashgraph like blockchain is a form of distributed ledger technology (DLT). However unlike blockchain it doesn’t have a chain of blocks. Hashgraph is a graph that represents the flow of transactions, changes to the database across the network as well as an algorithm for determining which of these transactions to apply in a given order.

A hashgraph is a patented algorithm that promises the benefits of the blockchain, distribution, decentralisation and security through the use of hashing, without the drawback of low transaction speed.

While Bitcoin allows for approximately 5 transactions per second and Ethereum allows for approximately 15 transactions per second, a hashgraph can process thousands of transactions per second.

Hashgraph can achieve such speed and security because it adds a tiny amount of information on top of any transaction between databases. That tiny amount of information, or metadata, essentially keeps. A record of the last received transaction and the last one created. By taking those metadata one can build a picture of the flow of information within a network.

 

What is governance?

Governance refers to the process that a governing body goes through to determine what the product roadmap will be? What features are going to be added to the product? When those features will go to market? What rates are paid to the nodes in the network for their participation? What the fees are for the use of the network?

Governance can be thought of by using different model points as reference points. On one end you’ve got a dictatorship model where one person is calling the shots whilst on the other you have a full democracy.

 

Governance council type of model

This is a very special podcast for us as it is our first debate format on Insureblocks. We were extremely privileged to have two titans/Jedi Masters from the blockchain community join us for this podcast. On one side we have Richard Brown, Chief Technology Officer from R3, builders of Corda, advocating for enterprises to use private blockchain systems. Whilst on the other side we’ve got John Wolpert, Team Lead at Web 3 Studio at Consensys, builders of Ethereum based blockchains, advocating for enterprises to use public blockchain systems.

Have a listen to this fascinating podcast and if you’d like for Insureblocks to organise more debates on our show, do let us know.

 

About Richard and R3

Richard is the Chief Technology Officer at R3 an enterprise software firm that are the founders of Corda. Corda is an open source blockchain platform designed for the enterprise world. R3 initially began as a consortium of large financial firms trying to figure out what opportunity does blockchain represent for their firms and the implication blockchain may bring to their businesses. As part of this learning exercise and exploration they reviewed a number of blockchain platforms before deciding to build their own blockchain platform called Corda. Corda is available in an open source format and it is being used by a large number of firms to solve some interesting business processes.

 

About John and Consensys

John is the leader of a team at Consensys called Web 3 Studio. Consensys is a company that is dedicated to building a platform to enable people to build on the Ethereum blockchain. John’s Web 3 team focuses, as he puts it, “on novel unexpected and exciting use cases that can help developers really get behind blockchain and Web 3.0”

Previously John used to be the Global Head of Products at IBM’s blockchain and one of the cofounders of Hyperledger. However, John, doesn’t define himself as a Hyperledger guy or an Ethereum guy but more as a “stateful internet” guy. He is a big fan for pushing the managing of states in a decentralized manner.

 

What is Blockchain? - John

According to John, blockchain is just one part of an evolution of the internet towards a stateful internet. In other words an upgrade to the present internet that is essentially led by companies soloing servers sitting around controlling state, memory and business logic.

“There won’t be one chain to rule them all.” But now, I believe that in order for the Stateful Internet to avoid descending into a fight at the gates of Mordor, we do in fact need a trustless, permissionless, decentralized root chain playing umpire.

This can be done today in a decentralized manner similar to how we experience passing messages right now with packets of information going back and forth between different routers. However, managing state is a lot harder than managing passing messages. As messages go through a router, a router doesn’t have to remember what state it was before, what state it is now and coordinate that state with billions of other routers. Ethereum offers the ability to manage state between routers in a decentralized manner.

 

What is Blockchain? - Richard

For Richard, blockchain is a technology that enables us to do something we couldn’t have done before. It enables multiple different computers,

For the uninitiated, governance may seem like a side note. But in this exciting podcast, Thomas Cox, Chief Governance Officer at StrongBlock, is here to talk to us about “Governance 101 in a blockchain ecosystem”. Prior to StrongBlock, Thomas worked at Block.one which raised $4 billion in an ICO and launched the crypto currency EOS. He helped them set up their governance infrastructure. It was the first blockchain technology that allowed for governance to be done on chain in a variety of different ways.

 

What is blockchain?

A blockchain is just a ledger that has very serious promises around safety and security. When something is recorded on that ledger you can’t deny that it was there, you can’t change it and if you try to you will leave fingerprints of your attempt. This now creates a shared source of trust with players within your ecosystem. So instead of having insurance carriers and brokers disputing each versions of their respective truth you now have a shared system that all parties can be working from with a single shared version of the truth. This means as enterprises we can stop struggling over whose data to believe and now our struggle shifts into how do we make the data we all work from better.

 

What is governance?

Governance is essentially composed of three core statements:

* It’s making collective decisions

* Carrying those decisions out

* Tweaking the process for making the decisions

Thomas Cox, recommends anyone interested in governance to read James M. Buchanan, The Calculus of Consent: Logical Foundations of Constitutional Democracy.

 

What is a consortium?

A collective or a consortium is any group that gives up some of their individual power to the collective, to the entity that they're joining. Such that they can if they lose the vote, they're still bound by the majority decision and they can't opt out.

For example, in a consortium you have to figure out the following:

* Who is in and who is out?

* What are the criteria’s for joining?

* How to record proof that someone has joined and if there’s a free to joining how do you record proof of payment?

* What are the rules members of the consortium have to abide by? How is that proved?

* How to normalise the data definitions by establishing common data standards?

* How to harmonise the data flows and processes? So that for example rekeying of information isn’t necessary anymore.

If you’re going to play in the blockchain space, you’re most likely going to be doing it within a consortium and you’ll find that all of the work that you do to set up a consortium is about 90% the same work you have to do to set up a blockchain between your organisations.

You can download his presentation on: Politics and Governance of Consortium Blockchains as delivered 23-Jan-2019 Seoul

If the above represent 90% of setting up a blockchain system then why not do the extra 10% of effort to create a shared ledger where you can have that shared truth between all the parties?

Consortias aren’t something new. When people have very risky endeavours, they build consortia’s to find wants tackle the endeavour together. All blockchain is doing is helping us automate and smooth something that we've been doing as human beings...

For this week’s episode, we spoke to Kshitij Nangia, Director – COO Strategy at Aon, and Michiel Berende, Inclusive Insurance Lead at Etherisc. Our guests provide us with an introduction to the notion of inclusive insurance along with insights as to how blockchain can help increase insurance penetration in emerging markets such as Sri Lanka.

Etherisc has teamed up with Aon and Oxfam in Sri Lanka to offer small hold farmers weather-based crop insurance.

 

About our guests

Michiel started out as an underwriter at Interpolis, a Dutch insurance company. He moved on to work closely with the DHAN foundation to explore micro-finance and microinsurance solutions within India. As with most blockchain enthusiasts, he discovered Bitcoin in 2013 and was intrigued by how Bitcoin could facilitate small transaction values at a relatively low cost.

Kshitij has a background in strategy consulting. Prior to joining Aon in 2014, he worked in India and Chile as a strategy consultant in financial services. He is currently part of the COO strategy team at Aon.

 

About Etherisc and Aon

Etherisc is an InsurTech firm that focusses on blockchain applications within the insurance industry. The firm aims to offer “Insurance as a service” by becoming the Linux for insurance. The first phase of this goal went live recently through the launch of the General Insurance Framework (GIF) – an open-source codebase for Ethereum based insurance applications (dApps), which may be accessed via GitHub here.

Aon is a diversified professional services firm which provides risk, retirement and health consulting.  Aon is one of the “Top 3” insurance brokers.

 

What is blockchain and how does it work?

According to Kshitij, blockchain is digital ledger shared across parties. It has in-built audit trail that provides an immutable record which induces trust between parties. He believes the real power of blockchain can be harnessed when combined with AI and smart contracts.

Michiel adds on that blockchain permits P2P transfer of digital assets without any intermediary. The decentralized network is held together by nodes who process transactions in return for some incentive.

 

Inclusive insurance

According to Michiel, inclusive insurance (or microinsurance) refers to any insurance product offered to low income clients.  Roughly 1.6 billion people do not have access to microinsurance products. He provides some alarming statistics – insurance coverage ratios for some regions are rather low - Latin America stands at 8.5%, Africa at 5.4% and Asia – 6.9%.

Michiel estimates that there are 500 million small hold farmers globally without access to any insurance and index-based agriculture insurance, which is a good fit for blockchain, may be a solution to increase insurance penetration.

 

Project origins and background

Oxfam has been working on-ground in Sri Lanka with local insurer SANASA Insurance Co providing farmers with crop insurance. In March 2018, Michiel attended a conference where he spoke about agricultural insurance using blockchain and the impact that blockchain can have on the insu...

This is a bonus podcast as Insureblocks was invited to attend the All Party Parliamentary Group on Blockchain at the House of Parliament on Monday the 18th of March. It was a fascinating session hosted by MP Damien Moore with opening remarks from MP and Minister for the Digital and Creative Industries Margot James and blockchain advocate MEP Emma McClarkin.

Presentations were made by IOTA on Global Trade, by Oracle on the food supply chain, Everledger on the diamond supply chain and finally Lloyd’s of London, on behalf of the London Market Target Operating Model (LMTOM) program -  Insurance, Claims and transaction settlement.

We interviewed a number of the delegates by asking them what they were hoping to achieve at this event and in their opinion how the UK government could support blockchain.

We would like to thank the following participants for participating to this “Pulse” episode, in order of appearance:

Daniel McCoy Andrade, head of business development at Photocert

Emma McClarkin, Member of the European Parliament, East Midlands

Jens Munch Lund-Nielsen, Head of Global Trade & Supply Chains at IOTA Foundation

Vikram Kimyani, Cloud solution architect at Oracle

Najib Rehman, Data Strategy Lead at FarmaTrust

Areiel Wolanow– Managing Director of Finserv Experts

Manreet Nijjar, Co- founder & CEO, Truu

That’s it, this concludes this episode. What kind of support do you think the UK government could give to blockchain? Feel free to add your comments on Insureblocks, Twitter or Linkedin.

Note: We would like to thank both Areiel Wolanow and the Big Innovation Centre for the kind invitation.

In this exciting podcast, our 50th, we had the great pleasure of having Magda Ramada Sarasola, EMEA Insurtech Innovation Leader, at Willis Towers Watson return to Insureblocks. In this fireside chat we discussed the emergence of a new stack – the convergence of blockchain, AI, IoT, big data, machine learning and robotics.

This podcast sits at the epicentre of a pivot we’re doing at Insureblocks for 2019. In addition to reporting stories on blockchain within the insurance industry, Insureblocks is going to embrace three new themes:

* Cover new industries: finance, supply chain logistics, food and agriculture, automobile and transportation, and healthcare. The aim is to investigate their blockchain learnings and facilitate the sharing of best practice across industries

* Investigate how blockchain sits with this new technology stack that includes AI, IoT, machine learning, big data, and robotics. We believe  that while they’re noteworthy the potential these technologies have individually is limited but once combined as a stack there is the “multiplier” effect to their potential

* Deep dive into the legal and regulatory blockchain environment and of course best practices for establishing effective governance within blockchain networks

 

What is Blockchain?

In the initial days blockchain was often referred to as a shared excel database. Of course, now we know that blockchain is a lot more than that. Today blockchain can be looked as this ledger that participants who don’t know each other and don’t necessarily trust each other can transact without the need for an overseeing central actor. Transactions of value can be:

* Exchanged without being corrupted or changed

* Validating their authenticity and confirm that whoever is sending the value actually owns it

Consequently for Magda, blockchain is a sociological innovation. It enables peer-to-peer markets to work without centralised authorities. This has impact not just onto the peer-to-peer world but also onto the enterprise and business world whose ecosystems are highly dysfunctional. It gives enterprises peer-to-peer enablement which makes blockchain so interesting.

It’s a new governance paradigm that changes the way we organise markets and transactions of value in the broadest sense of the word (i.e. digital and physical assets).

 

Data the lifeblood of insurance

August last year, Insureblocks interviewed Bill Pieroni, CEO of ACORD– (Ep. 21 ACORD: data standards for blockchain in insurance) where he stated “Data is the lifeblood of the insurance industry, which fundamentally works by examining data to quantify risk”.  Over the last few years the nature, type and amount of data that is becoming available to the insurance industry has radically changed. Sandip Patel, Global Managing Director for insurance from IBM, stated that on Insureblocks that “Data is the new natural resource” and he mentioned three important points:

* Volume of data is changing – 2.5 quintillion (a thousand raised to the power of six {1018}) bytes of data is produced on a daily basis (as reported by ...