Interview: David Edwards, ChainThat
DLT: a differentiator for captives
Captives have until now primarily operated using traditional technology, but
the use of distributed ledger technology, or blockchain, has the potential to
revolutionise the sector, David Edwards of ChainThat told Monte Carlo Today.
Wednesday September 11 2019 Monte Carlo Today Day 4
Captives have traditionally relied on
legacy technology and in-house
solutions such as spreadsheets
to keep track of transactions and other
parts of their operations. With a plethora
of new technologies emerging, the tide is
turning, and the more ambitious captives are
embracing an opportunity to become more
efficient on many levels.
That is according to David Edwards, the
chief executive of insurtech solutions provider
ChainThat, which is working exclusively
with several captive clients to help them use
blockchain technology to drive competitive
differentiation and enter a new era for captive
Distributed ledger technology (DLT),
of which blockchain is one form, allows
multiple parties to access and amend a single
version of a contract or series of agreements
without the need for any central parties, and
in a way that there is always one consistent
and reliable version of the documents.
It can also be used to trigger so-called
‘smart’ contracts that facilitate payments
without the need for human intervention,
based on a pre-defined set of rules.
ChainThat, alongside its strategic partner
Xceedance, works with insurers and reinsurers
extensively and is growing its portfolio of
captive insurance clients—usually via the
corporate entities that own them, but it is
also working with more captive managers.
There are many applications of DLT
within captives, Edwards said. One of the
most effective and easiest to implement is on
the asset-management side.
“Bigger captives have many assets under their
ownership, but they will also change regularly
as equipment or whole businesses are bought
or sold. You can use DLT to keep track of those
assets in real time; it gives you a single version of
what assets there are under management at any
point in time,” he explained.
He added that such information is
invaluable to insurers and reinsurers as it can
be used to streamline the claims process and
make it more efficient and reliable.
exactly matches the assets in question, rather
than only at an annual interval,” he said.
The second application of DLT for captives
relates to their registration and regulation.
Some regulators are starting to embrace DLT
globally, using it to track all documents and
regulatory requirements related to captives.
Again, Edwards said, it means all the
relevant information is in one place and
accessible by multiple parties. That could
extend to the way captives comply with
economic substance regulations being set
down by the Bermuda regulator.
“The DLT could be used to capture all
regulatory requirements, documents relating
to tax, and anti-money laundering measures,”
Finally, beyond such specific applications,
Edwards noted that ChainThat increasingly
receives enquiries to help captives operate
“We are doing a lot on the captive
management side, especially where managers
are dealing with multiple captives through
the whole lifecycle,” he said. “This work has
the potential to revolutionise many aspects
of the captive sector, driving efficiencies and
allowing companies to manage assets much
better than before, with no spreadsheets and
only one version of the truth.
“Especially for the bigger, more complex
captives, there is much to gain from
embracing such efficiencies. It is the same
for any large, global organisation with many
moving parts and subsidiaries. DLT offers
that single version of a dataset which can be
used in multiple ways,” he said.
“Typically, when ChainThat starts working
with a captive, it builds a proof of concept
designed to illustrate the potential of DLT.
From there, we move to a trial phase, often
linking to existing platforms, before leveraging
it further down the line,” he concluded. l
David Edwards is the chief executive of ChainThat.
He can be contacted at: firstname.lastname@example.org
that single version of a
dataset which can be
used in multiple
“The DLT represents that single version of
the truth in terms of assets and what claims
are then applicable,” Edwards said. “It also
means that the corporate or captive is not
buying coverage for something it no longer
owns. That also saves money and makes the
whole process more efficient.”
He noted one of the most fascinating
things to emerge from this concept is the
idea that insurance coverage could change
and fluctuate in real time, depending on what
assets are owned by a company or captive.
“This could lead to a much more fluid
insurance solution where the coverage always