Marking a game-changing move in the sphere of parametric risk transfer and insurance, Arbol, a technology-centric parametric risk underwriter, has collaborated with the Institutes RiskStream Collaborative. Their exciting innovation? "dRe", a pioneering platform that harnesses blockchain technology for validating and processing parametric reinsurance trigger data - a first in the industry.
Labelled as the inaugural "on-chain data calculation tool for reinsurance", "dRe" promises to enhance transparency and expedite parametric loss calculations across the sector. Now live and operational, the platform is ready to support parametric reinsurance contracts, facilitating efficient triggering and monitoring.
The heart of "dRe" is a smart contract-based system, promising efficient and transparent parametric loss calculations, particularly for severe storm catastrophe transactions. This cutting-edge platform draws weather data from Arbol's decentralized climate data network, dClimate, and Chainlink's industry-standard decentralized oracle network. Hence, it can trigger a smart contract based on wind speed and location for specific peril events.
While it's not the first parametric insurance solution utilizing oracles and smart contracts to automate contract triggering, it is the first on-chain data calculation tool for named storm parametric reinsurance transactions, Arbol pointed out.
The advantage? By leveraging technology to monitor weather data linked to the trigger, claim initiation can be automated. Notifications and loss calculations can also be processed automatically, resulting in rapid payouts, streamlined data flow, and increased transparency.
Sid Jha, Founder and CEO of Arbol, described "dRe" as a "critical advancement" in Arbol's pursuit to uplift transparency and efficiency in the insurance sector. He emphasized how the platform, leveraging blockchain technology and smart contracts, was redefining the parametric (re)insurance landscape.
Patrick Schmid, President of The Institutes RiskStream Collaborative, underscored that the transition of this parametric (re)insurance application to the RiskStream Canopy platform signified a crucial demonstration of blockchain's potential in the insurance industry.
The significance of this innovation lies in its ability to automate the parametric trigger, notification, claims validation, and payout, regardless of the specific technology utilized. This level of efficiency, predictability, and speed in insurance and reinsurance contracts can enhance transaction effectiveness, coverage reliability, and risk capital efficiency. It also ensures greater accuracy, making advancements like "dRe" pivotal for the future of parametric risk transfer.
