Major insurers pull the plug on B3i insurance blockchain consortium – Ledger Insights
B3i, the blockchain insurance venture backed by more than twenty insurance companies and reinsurers, is to shut down. The company was founded in Switzerland in 2018, and the financing came exclusively from insurance companies. An inability to close a further round of financing triggered the insolvency. The most recently announced funding was a Series B in late 2020 of an undisclosed amount, following a Series A of more than $20 million.
The founding insurers were Zurich, Swiss Re, Generali, Allianz, XL Innovate, SCOR, Aegon Blue Square, MAPFRE and Achmea.
A key question is whether this failure will be attributed to another large consortium, the technology, the timing, the agility or something else. Consortia are notoriously difficult.
A statement on the website reads: “The boards, after consultation with shareholders, have collectively concluded that there was insufficient support to proceed with the venture at this stage.”
Late last year, B3i announced it had landed a project to help manage nuclear reinsurance for six European nuclear pools. More recently, it started a partnership with the US insurance consortium RiskStream for parametric insurance.
Back in 2018, RiskStream and B3i seemed to be competing with each other. RiskStream had planned a larger external financing round in 2019, but nothing came of it. Instead, RiskStream progressed slowly by getting support from insurance companies on a project and piecemeal basis. In contrast, B3i received the funding.
In the early days of enterprise blockchain, insurance was the leading sector. That’s because there are many cases where the same insurance data is replicated between parties such as agents, brokers, insurers and reinsurers. And whenever there is a mismatch, it involves reconciliation processes that are often manual. In theory, blockchain solves that.
Some insurance projects are moving forward, including major insurance broker IMA which launched a Certificate of Insurance solution this week and Allianz’s cross-border claims solution last year.
It’s not just insurance
Last month, another of the earliest blockchain startups, trade finance firm we.trade, also went out of business. It was backed by a dozen major banks and IBM.
As an outsider, both we.trade and B3i had one key marker in common. Within a couple of years of their establishment, both replaced the manager, who had industry experience, with a more technical officer. Unlike B3i, we.trade never handed out the CEO job title, giving the impression that the backers of the trade finance firm were in the driver’s seat at the detail level.
We plan to update this story.
