“The Industry Has Reached a Tipping Point” says Jags Rao from Swiss Re
At the CV Summit in Zug end of March, Jags Rao, Director at Swiss Re was part of a panel discussion around the topic “What’s the corporate world #buidling on the blockchain?” One key take-away of the panel discussion with other industry experts such as Jorge Sabastiao (Huawei), Samyr Mezzour (Generali) and Daniel Rutishauser (inacta) was that the blockchain industry has reached an important tipping point: Big corporates are not just keeping an eye on the industry anymore — they’re now actively co-developing the platform and working hand-in-hand with Blockchain startups or ISVs.
We followed up with Jags Rao after the CV Summit to learn more about his view on the state of the industry.
What are you currently focusing on with the Swiss Re DLT team?
Last year at Swiss Re we developed a group level view and strategy on the application of DLT. In summary this strategy underscores the importance of the “consortia” approach for successful business change and the opportunity to realize value at industry/cross-industry level. We are now executing this strategy by selectively engaging and investing in emerging DLT digital ecosystems within and outside the insurance value chain to drive efficiency and growth respectively.
In your opinion, how will DLT influence or disrupt the insurance industry?
DLT as a tech enabler should not be seen in isolation. The combined innovation of IoT, Artificial Intelligence and DLT will drive the foundation of the next-generation financial services infrastructure, including insurance. We are witnessing the emergence of horizontal, integrated value chains of the future, which incentivize cross-industry players to collaborate using a common network/platform. For example, DLT platforms in the commercial supply chain extend their reach beyond their own ecosystem on to insurance players and count them as key network participants who consume data and leverage marketplace advantage. This is good for the insurance companies in the sense that they come closer to the end-customers in a B2B setting, forcing them to reinvent and provide services in a truly digital and customer-centric way. These new value chains of the future also pose great challenge to the entire insurance industry’s structure we see today.
What are the most interesting benefits of using blockchain technology for big corporations?
Blockchain — I prefer to call it DLT — is the new standard for digital transaction processing. Meaning, corporations can track data driven interactions without having to build different systems. But this can only happen if a critical mass of counter parties comes together, establishes minimum standards and digitizes the workflow. No doubt this is a hard ask as it requires establishing common incentives for collaboration upfront. But when they do work together for the common cause, it results in benefits in the form of reduced fraud, cycle time, operating cost and friction as well as enhanced transparency and more accurate customer specific data etc. These results are hard to ignore, as they create significant material savings. Another benefit for corporations is the massive opportunity to monetize on access to big data — structured and formatted data at scale, resulting from end-to-end digitization especially from within supply chains.
At the CV Summit you mentioned that the industry has reached a tipping point. Can you elaborate on the signs and reasons for that assessment?
There has been a number of proof-of-concept projects carried out in the industry over the last 3 years. However most of these trials have not gone beyond pilot stage leading to disillusionment. For me, this is an expected outcome considering the high number of use cases that were driven by blockchain as a starting point. These projects were only riding the hype, which reminds me of the “hammer looking for nails” situation. Instead, the starting point should be: “What is the problem that needs to be solved?” and then assess if blockchain/DLT indeed, is the winning model among the set of options.
Only in a handful cases, applying DLT would make financial and business sense. The companies that get hold of this maturity are bound to gain competitive advantage.
Going through this learning process is important for evolution, but now it is even more important to benefit from these learnings and drive those use cases with clear business benefits into production. We are not there yet but not far from it either.
Where or when will the general public start seeing first real-life applications in daily life?
First real-life applications will be in the B2B sector — something I see happening already. B2C applications, which the general public will experience, will follow suit but will take longer to sustain — potentially another couple of years — considering the higher data sensitivity and stricter regulations around consumer-facing applications.
About Jags Rao
Jags Rao is Director at Swiss Re and co-leads the DLT (Distributed Ledger Technology) practice.
Jags is a recognized thought leader in the insurance industry on blockchain and regularly speaks at conferences. He introduced blockchain to Swiss Re in 2015, spearheaded the insurance industry’s first prototype on blockchain and is since then driving Swiss Re’s strategic agenda for a successful business change using DLT. Jags coauthored a technical paper on privacy preserving transparency on blockchain networks. His passion is on the deeper and more disruptive aspects of DLT and Machine Intelligence in the new frontiers of digital economy. He is also leading a work stream at Swiss Re on Risk Management for Urban Air Mobility.
Jags cofounded CrowdPassion platform to drive grass root innovation within Swiss Re in a fast, flexible and agile manner.
He has over 23 years of experience in solution consulting, innovation management, service delivery and sales leadership with the blend of technology, business and entrepreneurial background.