One of Japan’s largest property insurers is co-developing a prototype blockchain system for insurance derivatives.
Sompo Japan Nipponkoa Holdings announced today that it is working with a firm called Soramitsu to develop a means to purchasing and exchanging insurance policies related to natural disasters and other catastrophic events.
The company said in a statement:
“The Derivative System Using Blockchain Technology (tentative name) that Sompo Holdings and Soramitsu have begun jointly developing aims to create a service that simultaneously shares data such as contract details on the blockchain to accurately and swiftly carry out every step in the insurance process, from managing risk aggregation for derivative products to determining whether or not to pay out on claims and implementing procedures to pay compensation.”
Sompo isn’t alone in exploring whether the technology can be used to create financial buttresses against disastrous situations.
Last year, French insurance firm Allianz announced that it was developing a prototype platform for the exchange of catastrophe bonds. At the time, the company cited the potential to increase the “reliability, controllability and speed” of those trades by using a blockchain-based system.
Further, last week, blockchain startup Symbiont held a demonstration in New York for a group of insurers and financial firms that saw it present a new system for exchanging catastrophe swaps. (An in-depth look at that demonstration can be found here).
According to Sompo, the trial with Soramitsu will potentially extend beyond the catastrophe insurance platform.
What these new products might look like remains to be seen, but Sompo indicated that any future developments would seek to “to contribute to the safety, security and health of our customers”.