It’s Conference Time!

Just a quick post to say I hope I will see you all next week in beautiful Burlington, Vermont for our Annual Conference.  If all our previous blogs, emails and calls didn’t convince you to register yet perhaps this photo will:

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It’s always sunny in Burlington!

Thank you and I look forward to seeing you next week!

Richard Smith
VCIA President

I Will Friend You…

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Let’s not beat around the bush: VCIA’s annual captive insurance conference is right around the corner (next week!) and I hired a firm that shall remain nameless {Cambridge Analytica} to worm my way into your Facebook account and send you subliminal messages to register today.

I am doing this for your own good. Our conference is an extraordinary opportunity to collaborate with captive professionals from around the world, as well as earn credits and enhance your knowledge of how to operate your business.  Two great keynote speakers including Jack Uldrich, renowned global futurist and Joel Cohen, writer and producer of ‘The Simpsons’, will be presenting next week.

And, in line with your inability to stop my intrusion into your Facebook accounts, we have a number of future oriented sessions on matters such as blockchain, Artificial Intelligence, and drones.  And at our conference technology is being used more than ever, for a more interactive conference experience: great conference app with an activity feed, electronic polling during the sessions, Social Q & A for every session (Social Q&A is a way for the audience to share questions with the presenters and ‘vote’ for questions so that the content of the session becomes more customized). Plus, we want to get you young professionals here so we specifically developed professional development sessions to keep your career invigorated, plus a Young Professionals Forum (I hear they think Facebook is so yesterday…).

Don’t make me take over your LinkedIn account as well! Click here to register today.

Thank you and I look forward to seeing you August 7 – 9!

Blockchain Gang

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If you are like me, no matter how many times you see a You Tube video on how blockchain works – you think you understand it. Then someone asks you to explain it and all you say is, “you know, it’s a distributed ledger system” like you know what the hell that means… but I digress.

Some recent articles in insurance trade mags noted that insurers need to be thinking about blockchain technology, as well as virtual currencies like bitcoin, and how to approach these areas of emerging risk as they become harder to ignore.  As a quick reminder, blockchain is the technology used for verifying and recording virtual currency transactions through a shared database. And virtual currency, such as bitcoin, is an unregulated digital form of currency that can be used as a substitute for legally recognized currency and eliminates the so-called “middle-man,” which includes banks and clearing houses.

Because it has only recently become more prevalent, and the hazards of blockchain technology and virtual currencies are still being quantified, there is hesitation among insurers about whether these risks are insurable – which sounds like an opportunity for the captive insurance community.  One emerging risk in particular, developer errors and omissions, represents potentially the most critical risk that threatens the survivability of a blockchain startup. Given the concerns regarding data and privacy risk, coupled with the SEC taking a closer look at digital currencies and blockchain technology, insurers have shied away from this space.

On the flip side of the coin, blockchain has the potential to become a useful tool in the transaction of insurance in the coming years.

One such trial, Allianz Risk Transfer (ART) partnered with Ernst & Young and digital agency Ginetta to create a blockchain prototype solution.  Their prototype looks at three common process flows in the captive insurance cycle – annual policy renewals, premium payments and claims submission and settlement. It translates these processes into the distributed ledger environment decreasing the time from start to policy, policy to premium and claim to settlement.

Additional use cases focusing on first notice of loss, subrogation and parametric insurance are being developed as well.  ART is one of several groups involved in the development of distributed ledger technology for the insurance and financial services industries, as the insurance world grapples with this emerging technology.

Correspondingly, a new law in Vermont takes advantage of the blockchain’s ability to confirm that information transferred to it is authentic by presuming that documents written to the blockchain are authentic for purposes of any legal proceeding in a Vermont court. Once again, Vermont law is poised and ready for changes that may soon come to the forefront in the financial services industry.

All this presents an interesting dynamic on the future of captive insurance. Captives are leaders in these types of shifts in the insurance world so I would not be surprised to see us catch this new wave and ride it to success!

Thank you and I look forward to hearing from you.

Rich Smith
VCIA President