London will be able to bring the kind of innovation to the insurance linked-securities (ILS) seen in Guernsey’s first ever blockchain-backed deal, according to Malcolm Newman of SCOR.
Newman, who leads the ILS taskforce at the London Market Group, suggested that if the Guernsey deal succeeds and is at a lower cost “then it could well push others to go down that route”.
He does doubt whether this type of settlement could ever replace traditional systems, such as through established infrastructures like Euroclear, because blockchain is “unproven technology”.
Newman commented: “People are trying to find uses for it and make it work and it does have some practical challenges. If the deal is successful then we will certainly see more of the same kind.”
The UK Treasury’s rules on London’s ILS legislation were published on 20 July and are currently with Parliament.
According to Newman, the legislation is due to come into effect this autumn with the aim for completion at the end of October.
Subscribe for free to the next issue of Captive Insurance Times, published on 23 August, to read the full interview with Malcolm Newman.
