Sompo Japan has announced that, in collaboration with Soramitsu Co. it has begun trialling the use of Blockchain technology for derivative products in September 2016.
Japan suffers many natural disasters, including earthquakes, typhoons, and volcanic eruptions, and in readiness for such risks there is a rapidly growing need for products such as climate derivatives.
Similar products are also sold overseas in emerging countries, which face natural disaster risks such as drought, especially in the agricultural sector. In response to the needs of this fast-growing domestic and international market, Sompo Holdings has teamed up with Soramitsu to start developing systems (currently in a beta version for user trials) that utilize Blockchain technology to provide customers with highly convenient derivative products and efficient services.
The Derivative System Using Blockchain Technology that Sompo Holdings and Soramitsu have begun jointly developing aims to create a service that simultaneously shares data such as contract details on the Blockchain to accurately and swiftly carry out every step in the insurance process, from managing risk aggregation for derivative products to determining whether or not to pay out on claims and implementing procedures to pay compensation.
Since use of Blockchain technology has the potential to enable provision of highly secure financial services and improve service efficiency while controlling system investment costs, Sompo Holdings and Soramitsu will also examine broader application of the technology to new insurance products. 3. Future Product Development Sompo Holdings will devise and develop products and services that use the latest digital technologies, including Blockchain technology, to contribute to the safety, security, and health of their customers.