When you think about an industry alliance, it’s easy to imagine a comfortable, slow-moving get together. Talking to Christopher McDaniels, Executive Director of the RiskBlock Alliance of insurers, the image is more of a rapidly moving train that has a clear destination.
RiskBlock is a non profit alliance founded by The Institutes, a member body that provides research, training and professional qualifications for the Property & Casualty sector in the USA.
In addition RiskBlock has signed up LIMRA that provides a similar role for Life and Annuities. McDaniels believes the non profit aspect is crucial in bringing the parties together.
The Alliance’s focus is on action, targeting a fast rollout of real-world production applications. They “don’t do Science projects.” Every prototype that’s built has to have a path to production. No one-offs or standalone projects. Everything is re-usable, ROI matters.
This is part of their “grow smart” philosophy. RiskBlock will only take on a new consortium member if they can provide the member with a production value blockchain (NOT just POC) in the first six months. McDaniels points out that it’s not hard to get people to sign up, the important thing is not to lose them. So far, 20 of The Institutes members have signed up.
To move quickly, they’ve created a software factory with five preferred solution providers, the initial one being Deloitte. The others (IBM, Cap Gemini, Accenture, EY) will start work within weeks. The plan is to have five use cases being worked on simultaneously. Less than six months after setting up the Alliance, they launched the first use case, the Nationwide proof of insurance app.
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’re currently working on:
- First notice of loss from a claims perspective
- Parametric insurance (weather oriented)
How to filter use cases is a hot topic amongst enterprises. Before RiskBlock started, there was a 12 week Deloitte strategy engagement. McDaniels was with Deloitte at the time, and they produced a use case prioritization model. At a top level it assesses:
- Benefit to Alliance members
- Use case requirements: effort involved and ROI
One of the core software features is re-use. If a policy blockchain is created, it will only be done once and re-used in other use cases. There’s a separate article about RiskBlock’s software approach.
Regarding human resources, RiskBlock provides product and program managers but outsources the development to their software factory.
From each Alliance member they ask for these individuals:
(a) someone with decision making capacity to help drive RiskBlock board,
(b) an operational person that has vision across operations to serve on the Use Case Strategy Committee,
(c) a strong technology person for the Technology Committee,
(d) a person assigned to each use case working group they’ve joined
By having a separate person for each use case, they reduce the risk of burn out given the planned pace.
In addition to the action orientation, there’s an R and D department to keep track of the fast-evolving landscape. Plus they’re partnering with incubators like Plug n Play and universities to provide a sandbox for startups.
The insurance industry is old-fashioned compared to most. It seems RiskBlock is just what it needs. If RiskBlock achieves half of its plans, it will be a significant success. The question is whether the member firms will have the motivation to keep up the pace, and are willing to co-operate with their competitors beyond the short term.