Allianz and Swiss Re have placed the world’s first legally-binding catastrophe excess of loss reinsurance contract on distributed ledger technology (DLT), enabled by the live production network of DLT solutions provider B3i, of which the two reinsurance companies are members.
The placement covers one of Allianz’s core catastrophe reinsurance contracts, including key submission parts, final terms and contractual clauses binding to both parties involved in the transaction.
A recent whitepaper by B3i investigating the subject of legally-binding reinsurance contracts and new technologies noted that reinsurance contracts are not generally regulated by an overarching statutory law owing to the transnational nature of reinsurance business.
Therefore, the whitepaper argues, the adoption of new technologies is not hindered by mandatory laws and can instead be based on internal technical and compliance requirements.
Following industry-wide testing, completion of this milestone by Allianz and Swiss Re will allow contract certainty according to B3i’s internal technological and compliance-related requirements.
B3i says that this will provide advantages on the legal, technical and operational aspects of Allianz and Swiss Re’s businesses, as it allows for certainty over a DLT contract in a regulatory compliant manner.
Technical implementation of the placement adhered to the reinsurance companies’ corporate security and technology policies, as well as respective internal requirements, B3i adds.
Commenting on the placement, Jan Stoermann, chief underwriting officer at Allianz Re, says: “The signing of the first legally-binding reinsurance contract on the B3i platform is a step into the future for Allianz. It showcases the capabilities of the platform which we plan to expand on, as we will explore how to further integrate B3i’s platform into our transactional processes, such as accounting and claims management.”
John Carolin, CEO of B3i Services, adds: “This global first marks another significant milestone in our journey. We are delighted to be able to generate the benefits articulated by our customers and industry frontrunners Allianz and Swiss Re, and this outcome is a testament to the collaborative way in which our customers shape our products.
“Our B3i Re solution has matured over the last years and today, with its extended functionality, compliments current market practices, has broad application and blazes the trail of digital transformation. Thanks to the pioneering work by multidisciplinary teams across B3i and its stakeholders, the multitude of benefits is now available to both large and small customers.”
