Blockchain is much more than just hype and research projects show that the technology will add value for the financial, insurance and captive industries.
Blockchain is much more than just hype and research projects show that the technology will add value for the financial, insurance and captive industries. A pioneer in piloting and implementing this technology should look to target the world’s largest onshore captive domicile, Vermont.
Accordingly, the Distributed Ledger Governance Association (DLGA) formed a blockchain working group, which is made up of local government figures, the Vermont Captive Insurance Association (VCIA) and service providers.
The Vermont blockchain-driven captive ecosystem
Personally, I am looking forward to working with established industry participants. In my opinion, the distributed ledger technology will have a major impact on the captive industry. Everyone is aware of this, but sustainable practical examples are still lacking. I am convinced that Vermont—with all its excellent prerequisites—will provide a remedy.
Vermont has a well-established reputation as a premier global captive domicile. It is the world-wide leader in captive insurance by premium written and third in the world by active licenses. As the leading captive association in the US for over 30 years, the VCIA has been at the forefront of championing innovation in the captive industry.
The DLGA was organised in Vermont to carry out its mission to enable its members to successfully demonstrate and accelerate commercialisation of their DLT. DLGA believes this can best be accomplished through effectively engaging with government, industry, and other stakeholders in Vermont to help drive DLT innovation, economic growth and enhancing citizens’ lives in Vermont and globally.
David Thelander, a DLGA board member, says that companies are already on board and that topics have been defined for the first pilot projects. Thelander is now looking forward to the continuous expansion of the participating institutions and to the first successful market implementations.
With this strong momentum underway in Vermont, VCIA and DLGA believe that the time is ripe to organise a captive blockchain industry working group involving both the DLGA and VCIA. The goal of this group is to encourage collaboration among captive insurers and managers, blockchain technology companies, entrepreneurs and other stakeholders to accelerate the opportunities for captive blockchain innovation both in Vermont and globally.
The close collaboration of captive industry stakeholders and service providers with government institutions creates a unique opportunity that could serve as a blueprint for the rest of the captive world.
Rich Smith, president of the VCIA, welcomes the development in Vermont. He says: “The Vermont captive insurance industry welcomes the opportunity to explore the potential benefits of blockchain-enabled technology and where appropriate, use it to help our members succeed.”
John Burton, DLGA chair, adds: “The DLGA is pleased to host a forum of engaged captive insurance stakeholders to accelerate the meaningful use of blockchain in the captive insurance space.”
He continues: “We look forward to facilitating what we believe will be lively discussions and important recommendations.“
Stuart Quick, lead at AXIS Cyber Insurance Center of Excellence, adds: “The AXIS Cyber Insurance Centre of Excellence has enjoyed developing a cyber cover solution with RYSKEX and we are looking forward to continuing our work with them and with DLGA in developing parametric solutions.“
Strategy of the DLGA
Blockchains can be used anywhere information needs to be securely managed and verified. The technologies are based on a decentralised open source network that is driven by all network participants. This results in greater efficiency due to consistently verified, unambiguous transactions.
The captive industry is particularly well positioned to explore the potential benefits and risks of blockchain technology applications.
Potential benefits of blockchain technology to the captive industry include:
Efficiencies:
Transparency: parties have real-time visibility into the location, condition, and safety of high-value assets moving around the world, which leads to accurate, dynamic, and fair underwriting and pricing.
Industry (including the captive industry) challenges include:
Potential opportunities of participating in the DLGA captive working group
As a member of the group, participants will be able to collaborate, pilot, and experiment in the development of a number of different blockchain applications for the captive insurance industry, as well as identify hurdles and potential roadblocks. These applications include, but are not limited to:
Blockchain is an emerging technology that has the promise to transform the captive insurance industry.
This group seeks to continue the collaborative nature of Vermont’s captive insurance industry in pursuit of the state’s position as the Gold Standard captive domicile.
If you are interested in working with DLGA, you can reach John Burton at john@dlga.com and David Thelander at dthelander@gravelshea.com.
