Blockchain Insurance Industry Initiative (B3i) has announced that it has filed for insolvency after failing to raise new capital in recent funding rounds.
Formed in late 2016, B3i represented a collaboration between various insurers and reinsurers to explore the potential of using Distributed Ledger Technologies (DLT) within the industry.
The Initiative successfully raised tens of millions of dollars in funding over its first few years of activity, and gained the support of some of the world’s largest insurance and reinsurance firms.
Even as recently as April 2022, the company’s technology was used by Allianz and Swiss Re to place the first XoL reinsurance contract on DLT.
But in a public statement, B3i has now confirmed that, following consultation with shareholders, its directors have “collectively concluded that there was not sufficient support to continue with the venture at this stage.”
The announcement will come as a surprise to many, given the large number of significant reinsurance players that have participated in and financially backed the B3i project.
But notably, at this stage none of these players have yet offered to step up and save the Initiative from insolvency, suggesting that supporters may have lost confidence in the product’s direction, or even in the need for blockchain in reinsurance transactions altogether.
B3i has long claimed that implementing blockchain technology within reinsurance is the key to enabling fundamentally digital end-to-end transactions, arguing that it will add efficiency and security to each stage of the process.
However, there may be some industry supporters who feel that B3i lost focus on its original mission of adding efficiency to focus on other prospects, or that the real-world benefits of integrating blockchain had been overstated during earlier periods of excitement over the technology.
On the other hand, B3i’s demise could also reflect the challenging venture capital funding environment more broadly, where many tech start-ups are finding it harder to raise new funds at present.
The full reasons behind B3i’s failure to secure continued funding are for the moment only speculative of course, but are likely to be manifold and will hopefully be revealed in due course.
It also remains to be seen whether any of the technology developed by B3i will survive to be used again by interested re/insurance parties, or perhaps under a new iteration of the project.
From banking and payments to insurance, blockchain technology has the potential to make interactions quicker, less-expensive and safer.
A prominent example of the development and use of blockchain technology in the insurance industry is the work of the Blockchain Insurance Industry Initiative (B3i), a group of member companies that came together to test the potential of blockchain for insurance.
The B3i initiative was spun off into a separate entity known as the B3i Consortium. The consortium incorporated as B3i Services AG in 2018 and is 100% owned by 21 insurers.