Insureblocks

Cindy Vestergaard is the Stimson Centre Director, Nuclear Safeguards Program & Director, Blockchain in Practice program. In this podcast we discuss the interesting work she does in safeguarding nuclear material with blockchain technology.

 

What is blockchain?

Blockchain is a subset of DLT, which is essentially a combination of a variety of different technologies that have been around for already a number of decades, such as peer to peer protocols, cryptography hashing, to make it an immutable ledger that can be shared securely, digitally, across the ecosystem.

 

The Stimson Centre

The Stimson Centre is a think tank that was set up in 1989 by Barry Blechman & Michael Krepon at a time when the Cold War was ending shortly before the fall of the Berlin Wall. It’s a nonpartisan and independent centre that looks at real world problems.

The work that Cindy’s team does is evidence-based policy research that sits at the intersection of technology and policy.

 

SLAFKA

In 2019 a partnership was established between the Finnish Radiation and Nuclear Safety Authority (STUK), the Stimson Centre in Washington, D.C., and the University of New South Wales (UNSW) in Sydney, Australia, to develop the world’s first distributed ledger technology (DLT) prototype for safeguarding nuclear material, called SLAFKA.

Finland is the first country in the world to be building a deep geological repository for its spent nuclear fuel. STUK, its radiation and nuclear safety authority approached the Stimson Centre for helping them develop a prototype.

The question for STUK and for the government of Finland needed to answer is how to ensure that the material underground is also the same that is reflected on the books above ground. Data integrity is very important. The other reason is concerning their relationship with Euratom, the regional safeguards body for the EU’s member states that ensures a regular and equitable supply of nuclear fuels to EU users. The objective is in increasing security, enhancing data sharing and transparency between STUK and Euratom.

For the Stimson Centre, the opportunity, was to see if DLT can actually handle the different types of transactions that are needed under a nuclear safeguards agreement.

 

Data transactions and trust amongst parties

From a data transaction perspective; nuclear material moves within a facility, within a country and internationally. As it moves it also shifts in form for example from yellowcake or uranium ore concentrates to enriched uranium. All these movements and change of state have to be logged and reported to either a national regulator or a regional regulator such as Euratom within the EU and then to the International Atomic Energy Agency (IAEA) in Vienna.

Source: Stimson Centre

Today’s data transactions come in all shape and form both in terms of paper and in an electronic format. The IAEA has a portal for safeguards declarations but it isn’t universally used. Some countries still provide their declaration on a USB stick whilst others on paper.

In the nuclear world there isn’t a lot of trust among different parties. The IAEA goes in to monitor and verify that what states are doing is actually meeting their obligations in using n...

Walid Al Saqqaf, Founder of Insureblocks and CEO & Co-Founder of Rebalance Earth joins us in this podcast to discuss the role blockchain has in fighting climate change but also the impact it can have in regenerating biodiversity. In a world that is increasingly threatened by the challenges of climate change, ecosystem destruction, and the 6th mass extinction, carbon credits and carbon offsetting markets seem ill equipped to face them. The markets are plagued by a lack of transparency and a number middlemen here to make a quick buck, can blockchain, AI and Internet of Things along with keystone species like African Forest Elephants provide an answer?

 

What is blockchain?

Bruce Pon, co-founder of Ocean Protocol, mentioned blockchain as this “general purpose technology” like the steam engine during the industrial revolution. Now everyone will tell you that blockchain is a distributed database that removes the need for intermediaries and that has immutable or tamper proof properties.

From the perspective of Rebalance Earth, Walid looks at blockchain from two perspectives, a short term and a long term one:

On a short term it is a technology that allows for the transparent, traceable and trusted transfer of value, from firms and households wishing to rebalance themselves, to local communities that are here to safeguard keystone species like African Forest Elephants who perform the carbon offsetting services and the maintenance of whole biodiverse ecosystems.  All this in a transparent manner to avoid corruption and double counting.

From a long term perspective, we all know today that biodiversity is important. However we don’t have enough data to understand how important it is, and crucially how much it’s worth. To get the necessary amount of data to begin to understand biodiversity you need a very large number of actors around the world to share their data. This is where blockchain can come in, in the creation of a data marketplace that will facilitate the share of data to unlock the value of biodiversity

 

Rebalance Earth

Co-founded by startup founder, Walid Al Saqqaf, Assistant Director at the IMF, Ralph Chami, world renown conservationist Ian Redmond, along with 60 volunteers, Rebalance Earth is a purpose driven company whose aim is to re-imagine carbon offsetting as a mechanism to fund the protection of keystone species to promote and regenerate biodiversity. Other ecosystem services attributable to these species will follow as research reveals the value of their role in the ecosystem.

Biodiversity is the variety of life on earth in all its form and all its interactions.

A keystone specie is an organism that helps to define an entire ecosystem. It is one which has a disproportionately large effect on its natural environment relative to its population size. If that species dies an entire ecosystem risks collapsing. Equally if a keystone specie is reintroduced into an ecosystem it can reflourish. This is the case of what happened in the Yellowstone National Park when 31 wolves were reintrod...

Silvia Attanasio, is the Head of Innovation at ABI (Italian Banking Association). Previously to that role she worked for 17 years at ABI Labs, the centre of research and innovation at ABI. Previously Silvia introduced us to Spunta, the private permissioned DLT project for interbank reconciliation. In this podcast she shares with us some of the work that ABI and its consortium of Italian Banks are looking to offer to the European Central Bank in its development of its CBDC called the Digital Euro.

 

What is blockchain?

Blockchain is a disruptive technology that can deeply transform the way we transact. It may add transparency and eliminate frictions in transactions. Blockchain is not a cost cutting technology. It is a technology that can bring some efficiency gains in due course. Blockchain technology can transform processes

 

Update on Spunta

Silvia featured on Insureblocks on the 22nd March 2020 where she introduced Spunta, a private permissioned DLT project for interbank reconciliation.

The new application streamlines and automates the reconciliation of transactions, improving governance of the overall Spunta process, a nostro vostro account, and moves from a slow error prone settlement system to a real time management of the reconciliation process.

Today after three waves of migration, nearly 100 banks are in production operating the Spunta DLT daily. Each bank has its own DLT node, geographically distributed in nine different cities across the country processing 322 million transactions.

 

Introduction to Central Bank Digital Currency (CBDC)

The term CBDC denotes money that a central bank could create in digital form and make available to the general public. It would not be another currency, it will be another form of the existing currency.

In January 2021, The Bank of International Settlement ran an updated survey with central banks around world. In it they found that 86% of central banks are engaged in CBDC work. P from 80% in May 2020. Central banks representing 1/5 of the world’s population are likely to issue a retail CBDC in the next three years.

The goal of improving financial inclusion is much more pronounced in emerging economies, while it is less present in advanced economies like European Union, where the main objectives are the security and efficiency of the payment system.

 

The Digital Euro

The European Central Bank’s CBDC is called the Digital Euro. The ECV see’s three main benefits in exploring the possibility of launching a Digital Euro:

* Support digitisation for a native digital European economy

* Respond to the declining usage of cash as a means of payment.

* Tackling sovereignty concerns related to foreign private digital means of payments in the euro area or possible future foreign CBDC

There are a few more benefits from the bank’s perspective that Silvia highlighted such as the possibility of enabling use cases based on the programmability of the currency, and the possible application to transactions from counterparties as a machine.

 

Preserving properties of cash, anonymity and privacy in a Digital Euro

Fabio Panetta, Member of the Executive Board of the ECB stated that in a

Gary Storr, General Manager of Trust Your Supplier by ChainYard, explained to us some of the challenges that the supplier information management industry is facing with disparate sources of information and the role blockchain can help to mitigate them. In this podcast you will hear how Trust Your Supplier creates a trusted source of supplier information and digital identity that simplifies and accelerates supplier onboarding, lifecycle management and the seamless exchange of information.

 

What is blockchain?

For Gary the best way to explain what is blockchain is what it isn’t. Blockchain is not a cryptocurrency, it’s a technology. It isn’t a programming language. Blockchain is a ledger that is organised in a sequence of blocks that are chained together. It is  distributed and it’s immutable. Blockchain is highly secure and decentralised, thus allowing for a multitude of participants to store information on the blockchain within the ledger. Security is assured by encryption and hashing technology making it impenetrable from current day hacking.

 

What is ChainYard?

ChainYard is a subsidiary of IT People Company, founded by Sai Nidamarty, its CEO. IT People Company is essentially an IT staffing business that was started in 1999.

IBM is a close partner to IT People Company, so when Sai noticed that blockchain was taking off he decided to spun off a new organisation called ChainYard with the intent for it to be a service organisation providing IT consulting services in and around blockchain.

Within a few years of launching ChainYard, Sai recognised there was an opportunity to create commercial applications on blockchain to address serious needs within the enterprise, such as Trust Your Supplier.

ChainYard is now a 5 years old organisation with 80 staff providing blockchain services and products.

 

Challenges of the supplier information management industry

Supplier information management is about getting information on a supplier. It is essentially an identity question which blockchain is particularly good at with regards to establishing an identity and to protecting it.

Traditional enterprises have traditional systems where identities are very segmented. It isn’t unusual for large supplier to have hundreds of identities within the system architecture. This is highly unmanageable. Systems could be storing, for a single identity, multiple versions of the truth for a contact with varying degrees of accuracy. Questions regarding data privacy are another issue.

Coming out of an enterprise and looking at the market a supplier would want to have a single identity as it deals with a number of customers. Similarly to a driver’s license or to a passport you want a single identity to be used across the value chain.

Consequently, there is an opportunity for efficiency, for speed, for reduction of cost, for reduction of risk and for compliance.

 

Trust Your Supplier (TYP)

IBM, a partner of ChainYard, recognised that there were some pain points within its supplier information. Both IBM and ChainYard expressed the desire to leverage their respective blockchain expertise to tackle those challenges. Trust Your Supplier was thus born to tackle not just IBM’s supplier identity issues, its supplier qualification and lifecycle management issues but also those of enterprises across industries in a decentralised manner.

Within its capacity as a partner IBM teams from TradeLens and Food Trust have con...

Christopher McDaniel is the President at the Institutes’ RiskStream Collaborative. In this podcast he announces the launch of Canopy 3.0 their latest version of their insurance blockchain platform. This new platform, built on Kaleido, supports Corda, Enterprise Ethereum and Hyperledger. Chris also shares with us his plans to launch first notice of loss in production mode on Canopy 3.0 this year.

 

What is blockchain?

Since the launch of Canopy 1.0 in late 2017, Chris' view of blockchain has evolved. Back then when they were building Canopy 1.0 their views were that blockchain was fundamentally a sharing mechanism. There weren’t many applications out there so they had to build use cases and applications to demonstrate to the market what is possible.

Now with the launch of Canopy 3.0 things have changed. GDPR, and the right to be forgotten, has had some impact on what you can and can’t do on a blockchain. There are now many parties building out solutions on blockchain compared to back in 2017. Whilst blockchain is still a sharing mechanism there is this realisation that you don’t need to put everything on the blockchain. You can store data off chain and link it to the blockchain via a validated hash. For Chris, blockchain is a great solution for verification, for trust and for facilitating sharing.

 

The Institute and RiskStream Collaborative

The Institute, parent company of RiskStream Collaborative, is focused on education and certification in the insurance industry. Their flagship certification is the CPCU certification amongst another 20 certifications.

Their reason for starting RiskStream Collaborative, is that the management at the Institute realised that emerging technologies such as blockchain, AI (artificial intelligence) and IoT (internet of things) are going to be key things they will need to teach and certify for insurance professionals in the future. Based on that they created RiskStream.

 

Canopy 1.0

Prior to creating Canopy 1.0 the Institute organised a working group for 30 insurers who wanted to find out more about blockchain. From that event three to four proof of concepts (PoCs) were set up on a public Ethereum blockchain. Some of the learnings they gained from that event was the need to build on a private blockchain. Canopy 1.0 was launched on a private Ethereum blockchain with proof of insurance as the one use case built on top of it.

 

Canopy 2.0

One of the key learnings that the team took out of Canopy 1.0 is that members of RiskStream Collaborative weren’t comfortable with the classic version of blockchain where everything is shared with everyone on the network. Whilst the information was encrypted and accessed on a permissioned basis it still had  trust issues along with legal and compliance ones as it was shared with everyone.

Chris and his team looked for an alternative solution and identified R3’s Corda as it had a point to point approach instead of everything being shared across the blockchain. This was a critical success factor for the consortium’s members. Purist would argue that Corda isn’t a blockchain but a distributed ledger technology (DLT). Whilst this is true from a technical standpoint, the DLT solution provided the answers to the challenges they were facing.

Pratap Tambe is the Head of BFSI Blockchain Consulting, UKI and Europe at Tata Consultancy Services (TCS). He has has 25 years of experience has been working in commercial insurance since 2011 and in blockchain with insurance since August 2015. In this podcast we discuss TCS partnership with B3i and how blockchain has evolved in the insurance industry since 2015.

 

What is blockchain?

Pratap looks at blockchain more from a DLT (distributed ledger technology) perspective. He uses an example where traditionally a transaction is sent to one or more web servers run by one party. Typically, one server validates that transaction, processes it and saves it. In DLT, a transaction is sent to multiple servers run by different parties which validate the transaction and together run a consensus process. Successful outcome of the consensus results in the transaction being processed and saved.

In blockchain that transaction will be saved in a chain of blockchain which isn’t necessarily the case in DLT.

 

Tata Consultancy Services

Tata Consultancy Services (TCS) is a 50 year old IT services company that is part of the Tata Group which has revenues of $106 billion. TCS has $22 billion worth of revenue from 470k global professionals that employs 36.4% women from a total of 147 nationalities.

 

TCS partnership with B3i for ecosystems innovations

In November 2020, TCS partnered with B3i to design, develop and launch ecosystem innovations based on DLT for the insurance industry.

Having worked in the London insurance market since 2011, Pratap is sharply aware of the difficulty competitors have in collaborating together. He believes that B3i has managed to launch a consortium blockchain of the ground with the participation of a number of those competitors.

B3i has developed a strong product vision and technology which requires a strong system integrator (SI) partner like TCS. As an SI, TCS plays a key role in enabling and scaling consortium blockchains to succeed.

TCS brings scaling up innovation, pipeline ideation and validation, product engineering, professional services and product support. These are natural services provided by a typical SI.

TCS already works with many global insurers and reinsurers across geographies from providing IT services support. Because of these relationships TCS brings unique value in helping blockchain consortiums provide back end integration into the blockchain to their customers and partners.

The role of the SI is to leverage its relationships to enable and support the baseline success of initiatives in core geographies of the blockchain consortium. Once that is achieved the SI is here to scale up innovation and delivery in core geographies and then to other geographies.

 

Ecosystems of ecosystems

Insureblocks is a big fan of the notion of ecosystems of ecosystems. We perceive a future where we will see cross industry blockchain consortiums connecting and exchanging value between each other. For example, B3i could connect to PharmaLedger in the pharmaceutical space or to Marco Polo in the trade finance space.

Pratap states that B3i connecting with other blockchain consortiums is part of the agenda. He also states that this fits well within TCS strategy of driving ecosystems whether or not they use blockchain.

One current example that Pratap mentioned is asset or property data. The insurance industry has a lot of this kind of data in various formats and in varying quality of data.

Shermin Voshmgir is the author of the book Token Economy, the founder of Token Kitchen and BlockchainHub Berlin. In the past she was the director of the Research Institute for Cryptoeconomics at the Vienna University of Economics which she also co-founded. She was a curator of TheDAO (Decentralized Investment Fund), an advisor to Jolocom (Web3 Identity), Wunder (Tokenized Art) and the Estonian E-residency program. In this podcast we discuss "How to design your own token system".

 

What is blockchain?

Blockchain is a collectively maintained public infrastructure where people are incentivised to keep the ledger up to date in a trustful manner. It is the backbone of this new generation internet often referred to as the Web 3.

Blockchain allows its participants to collectively settle data transactions, whether its value transactions or data flows on a shared public infrastructure that everyone can trust. This contrasts to today’s Web 2 which is managed by private client server infrastructure where data is managed and stored behind the walled gardens of a server that belongs to a specific institution or a private entity.

Shermin believes that blockchain itself isn’t particularly interesting. What is interesting is that blockchain brought the back-end revolution for a decentralised web or Web 3. Tokens are the killer application of the Web 3 as websites were the killer application of the early internet in the 1990s when the World Wide Web came about.

 

Types of tokens

Cryptocurrencies and crypto assets are specific type of tokens.

A token can represent money, whether it’s state issued money, often referred to as CBDC (central bank digital currency) or virtual currencies such as cryptocurrencies.

Tokens can represent any type of assets such as commodities, physical assets and fungible assets like art or real estate. Any virtual or real asset can be tokenized and have a digital representative that is easily traded.

Tokens can also be used to represent an identity of a person, machine or an institution. Credential tokens are tokens that are tied to an identity or that have limited transfer abilities.

 

Token System

A system is use to described how people and objects interact in this physical world. Token systems can have varying degrees of complexity.

Usually, the more actors are involved in a system, the more complex the system and its interactive parts become.

An example of a complex token system is the Bitcoin network which is a network of physical computers operated by humans or institutions. It has a three-layered network composed of tokens, machines, and peer-to-peer network.

An example of a less complex system is a token system that represents tokenizing shares in a company which can be settled on a public or semi-public infrastructure.

 

Creating a token system, the questions

Source: Token Economy, Shermin Voshmgir

When creating a token system the main questions that one ...

Blockchain Sandbox is Poland's first business and technology platform designed to accelerate the development of innovative blockchain solutions within an isolated system that simulates real world production environment. To take us through this innovative solution we are joined by Dorota Dublanka, President of the Foundation Cyberium and Head of Human Resources at KIR along with Maciek Jędrzejczyk, Blockchain Technical Leader at IBM for Central and Eastern European Region and lead architect of the blockchain sandbox.

 

What is blockchain?

Dororta defines blockchain as a list of records that is stored on a wide range of computers. She also refers to blockchain as lego blocks where different participants join together to build a tower together whilst verifying each blocks added to the structure and exchanging information between each other.

Maciek’s defines blockchain as a database with a very specific data structure whereby transactions are put together into a block representing an interval of time between the recording of a previous state and the current state which is going through the approval process. Each block is cryptographically linked to previous blocks and the governance over how the data is stored on the chain is determined by the network. The network decides whether or not certain transactions are going to be included within a block or not.

 

State of innovation within the financial sector in Poland

Maciek states that to understand the state of innovation in the financial sector in Poland one has to go back 30 years to 1989 – 1990 when Poland transitioned to a market economy. At that time there was no digitisation and computers were virtually inexistent. The financial infrastructure was nearly all paper based. Everything had to be created from scratch which represented both a set of challenges and opportunities for Poland.

Poland had virtually no technical debt, or legacy IT infrastructure  within its financial services sector that other countries in Western Europe or in North America had. This enabled the Poles to choose the best and most flexible solution to their specific needs. As the Polish leadership and society were very curious they were also very open to innovation.

Dorota added that, Poland has a relatively high social acceptance for innovative solutions. Poland has one of the highest percentages of mobile banking and debit cards users in Europe. Because of its embracing approach to innovation, Poland has adopted a lot of the most innovative platforms for payment solutions and its IT professionals rank as some of the top 10 best in the world.

 

The Blockchain Sandbox

Blockchain Sandbox is here to accelerate the development of innovative blockchain solutions in Poland. They aim to demystify what is blockchain and break the view that it’s only related to cryptocurrencies. They wish to develop blockchain technology to support entrepreneurs and companies to access solutions within the sandbox.

Startups and major companies who join the sandbox with innovative ideas can leverage blockchain within the sandbox for developing their applications and business solutions. They will also receive support from the blockchain sandbox founding members.

Foundation Cyberium is the leader of the Blockchain Sandbox. The founding members are PKO Bank Polski,

Bernhard Lang, Member of the Board at MSG System, joins us to discuss innovation and blockchain in the insurance industry. In this podcast we discuss the importance for the insurance industry to remain relevant in an ever changing market. How making innovation a corporate discipline and embracing a customer centric approach to remain engaged in customer ecosystems is critical to that objective of relevance.

 

What is blockchain?

From a non-technical point of view blockchain is a form of digital representation of what we naturally do in real life. We want to be part of social communities within which we communicate, make agreements, state facts, and make promises that are then known to the people within the community as a current status of things or an evolving collective truth.

The technical definition of blockchain is that it’s an immutable and distributed technology that enables the creation of new business scenarios. According to Bernhard, too often blockchain technology is looked at from a technology angle first before a business one. He personally prefers that we start with a business problem and then identify blockchain technology if it is the right one for the business problem.

 

About MSG

Bernhard Lang has been with MSG for the past 25 years. MSG is a German product based system integrator. MSG focuses on 10 different lines of business. Their business strategy is to develop industry specific content, software assets, software solutions, that go very deep into the lines of business along with a consulting services associated with it. The majority of MSG’s business is within insurance but also looks at other industry verticals such as banking, public sector, automotive and others.

In addition, MSG works with startups such as Ritablock (featured on Insureblocks: Ep. 124 – Reinsurance accounting blockchain, Ritablock integrates with B3i’s Fluidity platform) and they have co-developed the SAP FS-RI (financial services reinsurance), which has become the market standard for professional reinsurance companies and for cedents.

Outside of reinsurance, MSG has partnered with Marco Polo, a trade finance blockchain solution, to help them integrate with SAP European Systems.

 

Insurers approach to blockchain in comparison to mature platforms like SAP

Bernhard believes the insurance industry is quite open to blockchain technology however he notes that the materialisation of previous blockchain investments haven’t been that great. Consequently he believes that in the future the insurance industry might be more cautious to making investments in blockchain.

Source: Cookhouse Labs

MSG has an innovation lab in Canada called Cookhouse Lab. In May 2017, they launched a four week design thinking blockchain workshop along with seven insurance companies where they identified 34 uses cases and created three prototypes. Whilst there was a lot if interest at that time, Bernhard would qualify the output as having had a limited impact and not significant enough to be considered a game changer.

Whilst he believes insurers will keep looking at blockchain technology few will expect high returns.

 

Mark McLaughlin is IBM’s Global Insurance Director, leading IBM’s Global Insurance strategy, solutions, and partnerships.  Mark’s teams analyse trends in the insurance business and in technology, predict strategies for insurers, and build IBM insurance solutions to meet insurer needs. In this podcast we discuss the challenges and opportunities of blockchain in the insurance industry with special insights from IBM.

 

What is blockchain?

For Mark blockchain is a trusted shared ledger. It enables business entities with different interest and different goals, that may not 100% trust each other, to establish a common ground where a set of documents, processes and data is maintained by a group across a business network.

It is maintained in a way that is immutable where everybody can see the changes that are going on and where everybody has a record of it. Blockchain also have features like smart contracts that can help automate business processes in a trusted manner by all participants.

Mark points out that there are a lot of different things you can do with blockchain from digital currencies to running shared business processes.

 

How has insurance embraced blockchain technology?

Mark believes insurers are feeling the heat on innovation due to the 46% CAGR on Insuretech investment and the entry of large players like Ping An and Amazon into online distributed type insurance ventures.

Insurance being baked into other industries such as the purchase of an airline ticket in the US now comes with the offer of travel insurance as part of the process.

The insurance industry knows that they have to figure out ways to connect to broader ecosystems and to innovate. Blockchain is one way of doing that. Whilst insurers have a high level of interest in blockchain they have had a little trouble getting started in some cases.

Blockchain has great potential as a technology and an increasing number of insurers are willing to embrace it. The challenge however is with the business model. Other technologies such as AI (artificial intelligence) do not have the same challenge. AI is very easy to visualise, it can be used to better process a claim, underwrite a risk and advise an insured.

Blockchain is a little tougher. The challenge isn’t the tech it’s the use case behind the technology. Insurers who have been successful at using blockchain are those who have correctly defined the business value. It is however a very tricky exercise because blockchain is about creating networks and you have to ensure that the value line up across all the players within that network.

 

Digitising business during COVID

There is a tonne of complexities in the insurance industry and people tend to stick to the process they know because they know how to manage the complexities within that process.

However, some forward-thinking companies have during this COVID world looked at digital interactions and how they can rethink their business to leverage new technologies. For Mark, It is about “how do I build better interactions with my end user? How do I get closer to risk? How do I do a better job of providing personalised and customised advice around that risk? How do I connect relevant products and services at the point of risk?” Insurers that can figure that out and do that at scale will be the most successful ones in the future.

 

Approaches to innovation and blockchain

Too often insurers judge innovation in its ability to sell more of their existing products. The more successful insurers are those that think “Instead of how do I take my existing policies and my existing business and adapt th...