Arbol Launches AI and Blockchain: Arbol, a US-based startup, has recently introduced dRe, a parametric insurance platform that harnesses the power of artificial intelligence (AI) and blockchain technology. Developed in collaboration with The Institutes RiskStream Collaborative, dRe marks a significant milestone in the realm of parametric reinsurance.
Parametric insurance, also known as index-based insurance, offers coverage against specific events such as floods or storms by providing a predetermined payout based on the severity of the event. The launch of dRe, referred to as the first on-chain data calculation tool for reinsurance, brings enhanced efficiency and transparency to the parametric insurance landscape.
The core feature of the platform, the dRe Lifecycle Dashboard, operates on a smart contract-based system. It facilitates swift and transparent parametric loss calculations for severe storm catastrophe transactions. By leveraging decentralized climate data from dClimate and Chainlink’s oracle network, the platform triggers smart contracts based on factors like wind speed and location to address specific hazardous events.
The automation provided by dRe streamlines the process of claim initiation, notifications, and loss calculations, leading to faster payouts, improved data flow, and heightened transparency. The platform also integrates the Arbol risk framework and pricing platform, powered by AI algorithms, to enable efficient underwriting.
One of the remarkable aspects of dRe is its adaptability to various risks, including rain, heat, and wind, thus expanding its applicability beyond parametric insurance events. The creators of the platform believe that its implementation represents a significant breakthrough in the insurtech landscape, introducing transformative capabilities.
The collaborative effort behind dRe involves Arbol, a global climate risk coverage platform, and The Institutes RiskStream Collaborative, known as the largest blockchain and emerging technologies consortium in the insurance industry. The development process utilized the Kaleido platform and RiskStream’s Canopy platform, an end-to-end reusable blockchain framework.
Sid Jha, Founder and CEO of Arbol, emphasized the revolutionary impact of dRe on severe storm catastrophe transactions. He highlighted its ability to deliver rapid, auditable, and reliable payouts, stating that the utilization of blockchain technology and smart contracts reshapes the parametric (re)insurance landscape. Jha expressed confidence in the platform’s versatility, envisioning potential adaptations to other perils in the future.
Patrick Schmid, President of The Institutes RiskStream Collaborative, regarded dRe as the first of many applications that will emerge from this partnership. He emphasized the pivotal role of blockchain technology demonstrated by transitioning this parametric (re)insurance application to production on the RiskStream Canopy platform, showcasing its potential in the insurance industry.
Arbol and The Institutes RiskStream Collaborative established a strategic partnership with the aim of creating significant value for the insurance industry through blockchain and decentralized data storage. Their initial focus centered on developing a blockchain-driven parametric solution, fostering trust and collaboration among all stakeholders. The partnership’s scope could extend to non-parametric insurance solutions for reinsurance programs, leveraging the unique benefits of smart contracts and distributed ledger technology (DLT).