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Big Insurers Are Uniting Behind R3's Blockchain Tech

R3 has scored another win in the insurance sector, giving the startup a wide lead over other distributed ledger technology (DLT) providers in the sector.

Revealed exclusively to CoinDesk, the RiskBlock Alliance, whose members include such insurance heavyweights as Chubb, Marsh and Liberty Mutual, has decided to build its first set of use cases using R3’s Corda platform.

The news comes soon after B3i, the European reinsurance consortium, decided to switch from Hyperledger Fabric to Corda. With the addition of RiskBlock, R3 now counts all the major insurance blockchain consortia as Corda users, including the Insurwave marine insurance platform created by EY and Maersk as well as regional initiatives in India and Italy.  

RiskBlock was officially launched in mid-2017 by The Institutes, an insurance research and education network, but the team behind the DLT consortium has spent at least two years testing enterprise blockchain solutions. Earlier this year, RiskBlock narrowed down its choices to a short list: Quorum (developed by JPMorgan Chase), Hyperledger Fabric, Corda, and Digital Asset.

“We went through an intense and laborious process and finally narrowed it down to two, which were Corda and Digital Asset,” Patrick Schmid, a vice president at RiskBlock, told CoinDesk, adding:

“It was a close race – and we haven’t worked out all the details yet – but we have decided on Corda and we are moving in that direction.”

RiskBlock was a founding member of the Ethereum Enterprise Alliance and much of the early work, including several proofs-of-concept, was done on a private version of ethereum, the world’s second-largest blockchain. However, the insurance consortium started to change course this year as it received input from member firms and also some of its potential partners.

Privacy – or, rather, the lack thereof in a system forked from a public network – was the dealbreaker for these companies, according to Schmid.

“What we learned from testing ethereum was that our members found huge value in the smart contracts, and found huge value in blockchain-enabled technology. But they were a little bit concerned about data segregation,” he said.

“Even with a private variant of ethereum, their concern really was around data being stored, even if it’s encrypted and hashed, on every node in the system.”

The new RiskBlock applications are proofs of insurance (with the goal of weeding out uninsured motorists); more efficient forms of data sharing when a policyholder first notifies an insurer it will be filing a claim; subrogation (think of when your auto insurance carrier pays you after an accident and then pursues the other driver’s carrier for reimbursement), with a focus on blockchain-based net settlement; and parametric insurance, which is paid out automatically when a triggering event such as a natural catastrophe occurs.

In terms of a timeline, Schmid said, “Everything is in progress now. We anticipate that we’ll have POI and First Notice of Loss fully complete and ready for member testing before the end of summer.”

Insurance and interoperability

Landing RiskBlock is another important validation for R3’s technology at a time when the bank-owned startup is rumored to be struggling financially. The company is set to release the commercial version of its enterprise software next week.

“Over the last few months we have seen several insurers migrate to Corda due to its enhanced privacy and scalability; information is shared on a bi-lateral or multi-lateral basis, meaning parties that are not involved in the transaction will not see it,” said Ryan Rugg, global head of insurance at R3.

“Corda gives insurers the ability to integrate and secure disparate data sources, whilst simultaneously ensuring transparency across an interconnected network of clients, brokers, insurers and other third parties,” he added.

In a sense, B3i’s switch from Hyperledger to Corda made fellow insurance consortium RiskBlock more likely to settle on the R3 platform as well, all else equal.

That’s because, according to Schmid, the potential to “make interoperability an immediate thing” was a big factor in the platform selection process at RiskBlock.

“One of the major catalysts for us to narrow our selection process down to ranking Corda at the top was that it’s potentially also going to be leveraged by European reinsurers in the B3i initiative and by the InsurWave initiative – and some other smaller initiatives,” he said.

B3i, founded by insurance giants Allianz, Aegon and Swiss Re, and supported by AIG and AIA, gave similar reasons as RiskBlock in explaining its switch from Hyperledger Fabric to Corda.

After re-evaluating our criteria around data privacy, developer productivity and interoperability we concluded that Corda is a perfect fit for our insurance use cases and also for our future strategy for an insurance business network,” Markus Tradt, CTO at B3i, told CoinDesk.

Tradt said B3i’s vision goes far beyond single-purpose blockchain deployments for a specific use case and that his consortium is working with partners and third parties for application developments.

Hence, “interoperability is crucial for us,” he said, “To that end, we are actively pursuing collaboration or partnerships with other platforms and initiatives.”

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Blockchain Startup R3 Could be Floundering, Out of Money

According to employees at the company, blockchain based financial services provider R3 could be floundering and out of money by early next year.

In a report by Fortune it was stated that the firm raised over $100 million in last year. Launched in 2014 the company had ambitious plans to provide blockchain solutions to a consortium of banks and financial institutions. It started well with the likes of Goldman Sachs and JP Morgan agreeing to be founding members of the consortium. The firm developed its own version of distributed ledger technology called Corda.

The first setback came in 2016 when some of its blue chip members, Goldman and Santander, left the consortium. The funding went well however and R3 hinted that the first round generating $107 million would only be half of their target of $200 million. Reuters reported that a further $15 million was raised from financial settlement provider CLS and two other companies.

According to former employees there were frantic efforts to raise larger sums but they fell short of their targets. Remaining anonymous, employees also stated that the original $107 million figure was overstated because it included consulting fees from prior years that R3 reclassified as equity under terms of its partner agreements.  According to Fortune the company said only $98 million was actually new funds.

R3 has been splashing the cash in order to finance their ambitious blockchain project with expensive real estate and first class corporate trips across the globe. CEO David Rutter’s salary has also been called into question with one staffer claiming that it is ‘outrageous’. Adding to their woes the field has become a crowded one and the company has serious competition from the likes of Hyperledger and a collective known as the Enterprise Ethereum Alliance which has secured some heavyweight partners such as Microsoft and IBM.

Lack of developers for the Corda blockchain has also been a headache for R3 with one former employee saying;

“Although R3 will say 1,300 architects are contributing to Corda, if you look at the public release notes of R3, there will be no more than three people listed. The public version of Ethereum had 10,000 developers contributing,”

R3 is also embroiled in a high profile lawsuit with Ripple in which it claims the rival firm owes it 5 billion XRP tokens. Ripple counter claims the payment is not due because R3 reneged on an agreement to provide services. The result of the suit could be the make or break for R3 with another former employee stating;

“Executives were joking about getting bought out, saying ‘Look for the vultures in Q1 of next year, and predicting Oracle or IBM or Microsoft or Accenture will arrive with a buyout offer, It will be a fire sale.”

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Credit Union Trade Body NAFCU Joins Enterprise Ethereum Alliance

The National Association of Federally-Insured Credit Unions (NAFCU), a U.S. trade organization, has become the latest member of the Enterprise Ethereum Alliance (EEA).

With the move, the body joins over 300 businesses that have already signed up to the consortium, pooling efforts to build enterprise-focused distributed ledger technology (DLT) that is compatible with the ethereum blockchain.

NAFCU, which also joined the Hyperledger blockchain consortium in October, will see its cybersecurity and payments committee engaging with EEA’s members to discuss how credit unions can get more deeply involved with the blockchain ecosystem, according to a press release.

NAFCU president and CEO Dan Berger stated:

“With this new partnership, NAFCU hopes to bring critical knowledge of blockchain technology to the credit union industry and create an innovative environment where NAFCU members can inform technology firms of what credit unions need most.”

More than 50 companies have joined the EEA in the past three months, including Hewlett Packard, Australian Digital Commerce Association and Sberbank. More recently, oil and gas supply chain management platform PetroBLOQ became a member of the group on Monday.

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Enterprise Ethereum Alliance Adds 48 New Members

Forty-eight companies have joined the Enterprise Ethereum Alliance, including Hewlett-Packard spin-off HP Enterprise (HPE).

The list of new members is varied, drawn from the blockchain startup ecosystem as well as the IT, finance and academic worlds. Among the new members is the University of New South Wales, which this week unveiled a new consumer loyalty research initiative that sees it offering the cryptocurrency ether as a reward for purchases. In total, 200 firms are now taking part in the initiative.

It’s perhaps unsurprising that HPE would throw its weight behind the EEA, given its recent moves around the technology. As previously reported, HPE worked with distributed ledger startup R3 to develop new solutions for its client base, and by August had already begun testing with some of its customers.

Markus Ogurek, HYPE’s global financial services industry lead, said in a statement:

“Joining the EEA is a significant step for Hewlett Packard Enterprise in making blockchain enterprise-ready and accelerating our customers’ journey to production.”

First revealed in January, the EEA formally debuted in late February with the backing of major firms like JPMorgan Chase, British Petroleum (BP), Microsoft and a number of other established companies and blockchain startups.

Since then, it’s attracted new members like Japanese teleccom KDDI, the government of the Indian state of Andhra Pradesh and Sberbank, Russia’s largest banking firm.

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'Red-Lyra' No More: Bank Blockchain Group Rebrands

A Spanish blockchain consortium launched earlier this year has changed its name, revealing dozens of new members.

Alastria, formerly known as Red Lyra, was unveiled in May with the backing of several notable Spanish banks, including Banco Sabadell, Banco Santander and BBVA, as well as a group of law firms and corporations.

That effort has gathered steam in recent months, according to a new announcement. Some of the new members include utilities firm Gas Natural Fenosa, telecom provider MásMóvil, Japanese IT firm Fujitsu and several public universities within Spain. In statements, the consortium emphasized the inclusion of regional academic institutions, stating that they will “play an important role” as the project moves ahead.

Alastria’s aim is to facilitate data sharing between different companies, with the platform being described as a “national multi-sector network.”

The idea is that Alastria will serve as a common hub between businesses in Spain hoping to utilize the blockchain network, which as previously announced will support smart contracts and digital identity tools.

“We should be proud that a pioneering and unprecedented project throughout the world has been born in Spain, which places the industries of our country at the forefront of digital transformation,” said Julio Faura, president of Alastria and head of R&D for Banco Santander, said in a statement.

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Tradeshift Joins Hyperledger Blockchain Consortium as Premier Member

Hyperledger, the Linux foundation-backed blockchain consortium for enterprises, has added business network startup Tradeshift as a premier member.

With the announcement, Tradeshift, which helps companies send and pay invoices using its cloud service, joins other Hyperledger premier members including Accenture, American Express, Cisco, IBM and JPMorgan Chase.

In statements, Tradeshift indicated that, in joining the group, it seeks to explore open blockchain technology in order to accelerate innovation in B2B commerce.

The company’s CTO and co-founder, Gert Sylvest, who will be representing Tradeshift on the Hyperledger governing board as part of the membership deal, said:

“We’re excited to join Hyperledger and further our investment in distributed ledger technology through such a collaborative and innovative model. In an industry that is continuously transforming, we look forward to contributing to an effort that matches our own values surrounding community, collaboration, interoperability, and openness.”

Brian Behlendorf, executive director of Hyperledger, said the startup shares Hyperledger’s vision of building common blockchain technology that allows organizations to create and run robust, industry-centric applications and platforms.

The Hyperledger project now boasts over 160 members from industries across finance, healthcare, credit card services, the Internet of Things and aeronautics, among others.

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AIA and AIG Join B3i as Blockchain Consortium Adds 23 Members

Major insurance groups AIG and AIA are among 23 new members of the B3i blockchain insurance consortium.

The new slate of entrants was unveiled earlier today, drawing in members from Asia, the Middle East and North America, among other regions. B3i initially launched in October of last year, backed by a group of notable European-based insurers that included Allianz, Aegon, Swiss Re and more.

All told, the group now counts more than three dozen insurers and reinsurers amongst its ranks.

The companies join just as B3i prepares to begin testing a jointly developed platform focused on catastrophic insurance contracts, a process scheduled to begin later this month. Other projects being pursued by the consortium include a smart contract tool designed to streamline administrative work done by counter-parties to insurance contracts, as well as work that will see consortium members “developing and prototyping further use cases during 2018 for market adoption.”

“In less than a year B3i has become truly global, both in terms of the work we are undertaking and the companies we represent. We look forward to working with the new entrants who will take part in our market testing, and to learning from each other’s expertise and experience,” said Paul Meeusen, ‎head of finance and treasury services for Swiss Re and a co-founder of the consortium.

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Sprint and SoftBank Back New Blockchain Consortium for Telecoms

A group of telecommunications carriers has launched a new blockchain consortium.

Some of the notable firms involved include US-based carrier Sprint, Japanese telecom giant SoftBank, and FarEasTone, one of Taiwan’s largest.

The effort, dubbed the Carrier Blockchain Study Group, seems to have grown out of a collaboration announced between the companies in February. At the time, Sprint and others revealed that they were testing a platform, developed by blockchain startup TBCASoft, aimed at improving communications between carriers. The consortium will officially be unveiled during the Mobile World Congress Americas on September 12.

So far, the consortium has already successfully tested mobile payment systems and recharging prepaid phones across different carriers using the platform. In the future, the group will roll out applications for connected computing, personal authentication, and and debt resolution.

Doug Garland, Sprint’s VP for innovation and partnerships, said in a statement:

“CBSG is leading the telecommunication industry’s understanding and development of blockchain technology. The disruptive potential of blockchain on a global scale will be fully realized when carriers work together and leverage the new platform and ecosystem.”

The firms involved expressed hope that the consortium will attract other carriers. The consortium, according to the announcement, will act as a hub “for telecom carrier members to resolve issues related to technology, business and the regulations of various jurisdiction.”

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