The RiskBlock Alliance has created an enterprise software framework. On the one hand, it incorporates the concept of re-usability, which is hardly new. What’s surprising is that it’s blockchain agnostic – it is capable of supporting Corda, Ethereum, and Hyperledger.
There are a massive number of potential use cases in the insurance industry. But most are going to need a policy blockchain. RiskBlock’s framework involves re-using that blockchain and building on it.
“So we’ll have one policy blockchain, one claims blockchain, etc, that serve multiple use cases in a connected framework. So it gives you the best traits of being decentralized but also of being an enterprise framework as well.” Christopher McDaniel, Exec Director, RiskBlock Alliance.
While the Alliance is willing to support three blockchain flavors for now, their R and D department is monitoring newer blockchains to see when they might be ready for enterprise use.
They chose to use multiple blockchain flavors for two reasons. Firstly, they believe that in 2-3 years there’s likely to be a dominant blockchain, but who knows what that’s going to be. Secondly, RiskBlock is an industry alliance, and they didn’t want their member firms to have to throw away existing work. So they aim to incorporate it. When it came to the subrogation use case currently being executed, no less than three member firms had already done Proofs of Concept. On different blockchain flavors.
You’re insured by insurer A. You have an accident that is not your fault. Your insurer gives you a pay out, but you give the insurer the right to pursue recovery of the money. That’s subrogation. If the other driver is insured by insurer B, subrogation usually involves Insurer A claiming the money from insurer B.
They incorporate these different flavors by running two sets of parallel blockchains. The main blockchain for the use case and a parallel, inner, blockchain used for communication.
In the subrogation case, if one company has an Ethereum internal blockchain, and another has one on Hyperledger, they can each write to the communications blockchain.
“If we try to do that transformation process in the main blockchain that the use cases are using it would bog them down because of all that heavy lifting that’s going on behind the scenes. That’s why we have that inner circle blockchain doing the heavy lifting and feeding information to the outer circle, which interfaces to the use case.” Christopher McDaniel
Each Alliance member firm has an employee on the Technology Committee. For each use case, RiskBlock assigns a product and program manager.
With the stated aim of implementing five use cases simultaneously, the coding work is being outsourced. Deloitte built the core framework, and the use cases are to be implemented by Deloitte, IBM, Cap Gemini, Accenture, and EY.
Some believe that businesses in the future might be more open to using public blockchains. McDaniels thinks that’s unlikely in the insurance sector.
The business and tech strategy is undeniably ambitious. If RiskBlock pulls it off the insurance industry will be transformed. If or when one of the blockchain flavors become dominant, there’s going to be a ton of re-coding with the associated massive costs. But that applies to all industries, not just RiskBlock, and they’re hoping the flavor agnostic approach will give them a head start.
And by the time that re-code cost arrives, the financial benefits of a more efficient workflow will be demonstrable, and those substantial costs are likely to be small compared to the savings.