12 BLOCKCHAIN AND CAPTIVES www.captiveinternational.com
all the moving parts
Utilising blockchain can improve time and resource
efficiencies, making all the links in the chain work
smoothly, but blockchain’s success depends on the
industry working together, according to Alexandra
Gedge of JLT Insurance Management.
aptives often require many
links in the chain to make
everything work smoothly
and successfully for those
operating them. The services provided
to a captive include fronting companies,
multiple re/insurers, brokers, claims teams,
actuaries, auditors, captive managers, and
ultimately the captive owner.
Managing all these moving parts can
be an onerous, time-consuming task,
including the coordination of the board
meeting for the captive, and can be
particularly tested in the event of claims.
Subsidiaries and insureds of captives
want to see quick claims payments
for the individuals, and to minimise
disruption to the business operations.
One of the best options to manage
this process which has recently become
available is the emergence of blockchain
capabilities. Blockchain has been around
for a decade but so far its application
has been limited to the digital currency,
Bitcoin. We have started to consider the
potential benefits it can bring to captives
and the re/insurance industry.
What is blockchain?
Blockchain was introduced in
conjunction with the launch of the
cryptocurrency, Bitcoin, around 10 years
ago. In the Bitcoin market, it acts as a
shared public ledger of all the Bitcoin
transactions that have ever been carried
out. The entries on the ledger are called
‘blocks’ and the list or ‘chain’ of entries
grows as more transactions take place.
Blockchain is different from a standard
database because no data is held
centrally. Instead, it is shared across