Bitesize InsurTech: ChainThat
January 28, 2017 Greg Brown
ChainThat uses blockchain technology to provide business collaboration services for insurance and reinsurance markets.
The company was founded in 2015 by David Edwards, Vikas Archarya and Richard Walsh, 3 former Xchanging IT consultants with backgrounds in the insurance industry, who believe that blockchain represents “the only technology that matches the decentralised [insurance] business model.”
Blockchain: an explanation in 55 words
Blockchain was originally developed to support the cryptocurrency Bitcoin. Blockchain is a type of distributed ledger: elements of a transaction (“blocks”) are grouped together in a “chain” on a ledger – the “blockchain”. All parties have a copy of the ledger meaning that there’s a consensus view leading to advantages like transactional certainty and data security.
ChainThat’s first proposition to market facilitates insurance placement. ChainThat records every event that occurs during the insurance placement process in its technology. The blockchain angle means that each of the participants in the process have identical records.
In theory, managing interactions in this way offers is better than current market practice:
- Parties are able to agree their own governance procedures for a process;
- The blockchain ledger guarantees transactional certainty through provision of a common “source of truth”;
- Parties keep control of their own data rather than entrusting it to a third party;
- Costs associated with data access are reduced as you are not reliant on a third party to extract run reports.
ChainThat is also developing blockchain-based solutions for facility schemes and contract management. In recent months the team has completed proofs of concept with insurers in the London, European and US markets and are currently looking to take a number of these into production.
If none of that made sense, try ChainThat’s explanatory video.
The Oxbow Partners view
Blockchain has so far generated a lot of hype in the insurance industry (Blockchain is the new internet), with little evidence of impact. In a recent conversation with Oxbow Partners, co-founder and product lead David Edwards described the technology as “just an enabler” of the company’s business collaboration services offering. Indeed, he thinks that ChainThat will reduce their marketing emphasis on blockchain in coming years as clients see his proposition for its impact, not its base technology.
ChainThat has the most compelling blockchain value proposition that we have seen. However, getting from pilots to mass adoption is not going to be easy. The proposition relies on a number of parties coming together and agreeing a single governance structure and workflow for placement. No matter how good blockchain is as a technology it does nothing to solve this people problem.