European insurance giants are far ahead of their US counterparts in talking up blockchain technology, according to new research.
S&P Global, a data provider, searched transcripts of large insurers’ earnings calls with analysts for discussions of blockchain technology, and found 33 in the past two years. Of these, 15 were in Europe, with nine each in North America and Asia.
The research sheds light on financial giants’ differing attitudes toward the cutting-edge distributed ledger technology, which underpins cryptocurrencies such as bitcoin.
While banks and other mainstream finance institutions have been slow to leap into the volatile markets for trading crypto assets, many have begun exploring blockchain’s potential for building more efficient and secure transaction and administration systems.
In its research, S&P found that blockchain boosters should “look outside the US” for insurers interested in the tech, according to Thomas Mason, author of the latest report. Mason singled out several European insurers’ efforts.
Axa has a flight insurance project, called Fizzy, which uses “smart insurance” contacts written to the blockchain ledger that underpins the Etherium cryptocurrency.
German insurance giant Allianz is working on using blockchain in catastrophe-insurance swap agreements and captive insurance programmes. Prudential, the UK-based, Asia-focused insurer, has a digital trade platform in Singapore called Fasttrack Trade that uses blockchain.
Europe is also home to B3i, an initiative founded by 15 major insurers that is working on blockchain-based property catastrophe reinsurance.
But while European insurers collectively led the way, the Chinese insurance giant Ping An is the individual firm that has most frequently talked about the technology with analysts: on four separate calls since 2016.
Mason wrote: “Ping An considers blockchain one of its five core technologies, as executives mentioned during an investor day in November 2017… one of its main initiatives was the creation of a blockchain-as-a-service platform, which provides services to small- and medium-sized enterprises that want access to the latest technology.”
Mason drew comparisons between the Chinese insurance giant and the New-York based exchange operator Nasdaq, which “discusses blockchain frequently on its conference calls and, similarly, has made the technology one of its core product offerings”.
In contrast, US insurers seem to be adopting a “watch-and-see” strategy on the distributed ledger technology, S&P said. Mason said that if initiatives in Europe and Asia proved successful the US would likely follow suit and “plunge more deeply into the blockchain waters”.
To supplement its research of earnings calls, S&P also said it contacted 20 of the largest insurance groups in the US directly, but got only “a few responses”. In general, Mason observed, “information remained elusive”.
In June, Boston Consultancy Group attempted to spur the whole of the insurance industry into action, when it reported that P&C insurers worldwide could “generate upwards of $200bn more in technical margin from current gross written premiums” by adopting the technology.
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