Yesterday blockchain insurance firm Addenda announced its first five clients on its platform. The Dubai based company welcomed fellow UAE firms Aman Insurance, Al Wathba Insurance, National Takaful Company, Noor Takaful, and Oriental Insurance. Addenda aims to streamline insurance processes for regional businesses using distributed ledger technology (DLT).
The firm is based in the Dubai International Financial Centre (DIFC), which has its own regulations and legal framework different from the UAE’s national system. Both the DIFC and Addenda see the gain of clients using the platform as a success.
“When the DIFC set out to develop its comprehensive FinTech ecosystem, of which InsurTech is a key component, our mission was to establish a space where the world’s leading financial institutions could engage with innovative entrepreneurs developing cutting-edge technologies,” explained Peyman Al Awadhi, the Marketing and Corporate Communications lead at the DIFC Authority.
Karim Davis Dib, Addenda’s COO, thinks the center has been instrumental: “Our relationship with the DIFC provided a pathway to securing overall support from the region’s financial institutions. This is only the beginning of our insurance blockchain journey, and we look forward to achieving the next stage of success.”
The nature of insurance lends itself to DLT. Most policies involve at least a broker, an insurer and a reinsurer. For more substantial policies there are often even more parties and so even more data to keep in sync. Every time there’s a claim or policy change, all the organizations have to reconcile to make sure they have the same information.
By using blockchain, parties can share the data, doing away with the need for reconciliation. This is the primary motivation behind the InsurTech firm. Addenda uses the Hyperledger Fabric framework and claims insurance tasks are reported on their system in real-time. Each action is recorded immutably on the blockchain, so any policy changes are accountable and verifiable.
Addenda is not alone in the DLT for insurance space. The B3i consortium launched its first product last week and switched from Fabric to R3’s Corda last year. The other major consortium is RiskStream (formerly RiskBlock), which boasts firms including State Farm, GEICO, Liberty Mutual and Nationwide. It also selected Corda around the same time as B3i.
This is partly because Corda is not strictly a blockchain. There’s a greater emphasis on workflow, and each node stores only the data relevant to that company. Plus Corda blockchains can interoperate with each other on the Corda network.