B3i has 15 members including the likes of Aegon, Swiss Re, Allianz and Zurich Insurance Group. iStock

Some of the world's largest insurance firms have launched a working reinsurance blockchain prototype at the 61st Monte Carlo RVS conference in Monte Carlo.

The 15-strong insurance industry blockchain consortium, B3i, which includes the likes of Aegon, Swiss Re, Zurich Insurance Group, have been working on a joint distributed ledger for reinsurance transactions for over a year now.

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This is the first time the group has showcased its work: a fully functional beta version of its integrated blockchain solution for the re/insurance industry.

Paul Meeusen of B3i said: "I am really excited about our launch. Over the past four months, a dedicated, combined team drawn from B3i member firms has produced a working prototype covering the core functionalities required to enable a distributed smart contract management system for Property Cat XoL contracts.

"The deployment architecture is already close to a production-ready environment and the team is preparing for feature enhancements of the prototype and a first deployment into production in 2018."

The system is being built on IBM Blockchain, which leverages the underlying Hyperledger Fabric 1.0. This is a flexible, general purpose blockchain architecture with notable features like privacy channels, as well as the physical hardware-based security modules that come with IBM products.

B3i members have been looking to develop an industry platform for market participants to more easily cede, handle and trade risks. The short-term focus of the platform is on handling reinsurance contracts. The consensus amongst the companies is that a productivity gain of up to 30% is achievable; B3i's Sylvain De Crom added that all parties involved will gain from this efficiency. This means that brokers, insurers and reinsurers alike will benefit from lower administration costs and will be able to offer more attractive rates and fees in the future, in a statement.

The immediate next step is to launch a market beta-testing program for the prototype starting in October 2017. All insurance industry participants (insurers, brokers, reinsurers) are welcome to join this testing program, said B3i. Existing B3i members and new participants will be able to take part in the test on an equal basis of a common testing agreement.

The participants will be granted access to a 'sandbox' environment to simulate the creation and settlement of contracts and will be expected to feedback comments and change requests through defined channels.

All participants will also gain access to B3i user group workshops until the end of 2017. The current governance and membership composition of B3i, based on a contractual agreement between the 15 companies, will remain unchanged until 31st December 2017.

A review is underway to consider creating a more permanent operation within a legal entity in 2018, it said.

The current 15 members of B3i are Achmea, Aegon, Ageas, Allianz, Generali, Hannover Re, Liberty Mutual, Munich Re, RGA, SCOR, Sompo Japan Nipponkoa Insurance, Swiss Re, Tokio Marine Holdings, XL Catlin and Zurich Insurance Group.