Yesterday, insurtech Arbol and The Institutes RiskStream Collaborative announced that the dRe insurance solution had gone live on RiskStream’s blockchain platform. dRe uses smart contracts for on-chain reinsurance calculations.

Arbol offers parametric insurance, which automatically pays claims based on weather data and AI. One of its subsidiaries is a Lloyd’s coverholder and recently launched parametric offers for the US market underwritten by Beazley.

How dRe works

At launch, dRe’s goal is to automate claims for severe weather events. When there is a big storm, dClimate, a decentralized weather monitoring system derived from Arbol, will record the event. Using Chainlink’s blockchain oracle network, that data is fed into smart contracts.

The goal of parametric insurance is to avoid a manual claims process. Based on the insurance wind speed, the smart contract will initiate a claim and the system will automate loss calculations and notifications.

“By leveraging blockchain technology and smart contracts, we are fundamentally reshaping the parametric (re)insurance landscape,” said Sid Jha, founder and CEO of Arbol. “It transforms the way we manage severe storm catastrophe transactions by providing fast, auditable and reliable payments.”

The solution uses RiskStream’s Canopy platform and Kaleido technology.

We believe this is the second solution to go live in Canopy after the release of Rapid X, their First Notice of Loss (FNOL) solution. RiskStream has shown remarkable resilience in the face of numerous obstacles.

Five years ago, it looked like the insurance industry would be an early adopter of blockchain. Given the extensive data sharing between insurance organizations, it seemed like a logical choice. But that hasn’t worked. Still.

RiskStream was one of the first initiatives together with B3i, the latter backed by a dozen reinsurers. B3i closed last year. Guardtime and EY sold another early production insurance use case, the Maesk Insurwave marine insurance platform, and subsequently abandoned blockchain.

That does not mean that everything is pessimism. For example, Allianz has successfully implemented a solution for cross-border auto claims. And several insurtechs are embracing blockchain, including using DeFi as capital as an alternative to Lloyd’s. Ontomi is another insurtech that implements parametric insurance using blockchain for cargo insurance.