Bermuda’s role in accelerating insurtech innovation was in the spotlight at the PwC Insurance Summit. The island’s advances in blockchain, eID and supporting insurtech start-ups were highlighted at the annual conference, presented with the Financial Times.
David Burt, in a conversation with Robert Armstrong, US finance editor for the Financial Times, said he sees Bermuda being the world’s insurtech capital: “In five years, I think that what you will see, and what I hope to see, is Bermuda being not only the world’s risk capital, but also the world’s insurtech capital.”
The Premier said Bermuda has remained an important global hub for insurance and reinsurance by working with industry and its well-respected regulator.
“That’s why Bermuda has been so successful. Government does not make the decisions on the directions where we want to go. Government works with industry to understand what it is that’s needed in order to make sure that we can remain that centre of innovation.”
Wayne Caines, Minister of National Security, said he was excited about Bermuda’s foray into eID [electronic identification].
He also said that placing Bermuda’s land title registry on the blockchain was exciting, as was the Bermuda Monetary Authority’s insurance regulatory sandbox launch, and an innovation hub, both targeted at insurtech.
George Thomas, senior adviser, PwC Bermuda, moderated a panel on blockchain with Mr Caines, Andre McGregor, partner and global head of security of TLDR Capital, and Susan Joseph, North America Representative of B3i.
Mr Thomas said: “From our panel, we learnt that the Government of Bermuda is dedicated to being a leader in digital asset businesses, actively shaping the regulatory landscape for this rapidly evolving sector.
“Due to these efforts and our long-standing gold-standard regulatory reputation, Bermuda is attractive to innovative companies like Andre McGregor’s firm TLDR, which is building world-class custody solutions designed to meet the needs of the world’s largest institutions and high-net-worth individuals.
“From our panellist Susan Joseph of B3i, we learnt real world implementation lessons and questions that need to be addressed before embarking on a blockchain initiative. A key point is that insurance and blockchain will be inextricably linked going forward for two reasons.
“Many of the workflows, processes and data exchanges in insurance readily lend themselves to implementing blockchain as a technology solution. Non-insurance industry related blockchain solutions will require insurance if they are to achieve scale.”
Mr Thomas noted that it is estimated as many as 81 per cent of insurers today are familiar with blockchain technology and anticipate its widespread adoption across their industry, with 100 per cent of insurers planning on integrating blockchain into their production systems by 2021.
However, according to PwC’s blockchain report, only 8 per cent had planning to invest in the technology last year.
“So the pace of investment will have to pick up significantly over the 2018-2021 period in order to achieve the stated objective,” Mr Thomas said.
“As a distributed, tamper-proof ledger, a well-designed blockchain doesn’t just cut out intermediaries, reduce costs, and increase speed and reach, it also offers greater transparency and traceability for many business processes.”
Gartner forecasts that blockchain will generate an annual business value of more than $3 trillion by 2030. It’s possible to imagine that 10 to 20 per cent of global economic infrastructure will be running on blockchain-based systems by that same year, according to PwC’s report.