RGAX & Mutual of Omaha complete blockchain POC
RGAX, a subsidiary of Reinsurance Group of America, Incorporated, and Mutual of Omaha have announced the completion of a proof of concept – exploring reinsurance workflows on a distributed ledger (a.k.a. permissioned blockchain). The project provided a joint opportunity for a carrier and a reinsurer to experiment (using test data) with the automation of reinsurance transactions using distributed ledger and smart contract technology.
“We see growing support from the insurance industry for distributed ledger to streamline many of the manual insurance processes. With this technology, we hope to modernize data transfer across the industry by automating repetitive manual tasks, reducing administration effort, and better structuring data.” – Mitch Ocampo, Chair of the RGAX Distributed Ledger Team.
The project was conducted with the goal to demonstrate how smart contracts – self-executing code that interprets terms of an agreement – can execute rules based on a reinsurance treaty. With Mutual of Omaha as the ceding company, the primary use case involved the processing of monthly premium transactions based on risk sharing rules in the reinsurance treaty. The rules triggered premium payments on a quota share basis, based on a policy effective date, and reconciling these changes across all parties of the transaction in a distributed, decentralized system of record.
“Mutual of Omaha launched this joint effort to explore the art of the possible and experiment with test data in distributed ledger and smart contracts as we continuously look for ways to leverage technology for the benefit of our customers. Although this technology is still in its early stages, there are clear opportunities for innovation, some of which may radically change the way the insurance industry conducts business. We look forward to working more with partners like RGAX to lead this innovative work in the insurance industry.” – James Davenport, Senior Vice President of Finance at Mutual of Omaha.
“The space is changing daily, but today, the promise of using smart contracts to automate manual steps and simplify data transfer is real. Our joint collaboration with Mutual of Omaha shows growing market interest to test various scenarios like counterparty risk transfer, and we are optimistic about the shared learnings and outcomes. There is so much more to explore, and we’re excited to walk this path shoulder-to-shoulder with our clients.” – Ocampo.