In a recent interview with Captive International, partner

Bradley Kruger, explored the benefits Cayman offers as a jurisdiction

for blockchain use in the insurance industry. His comments are included

in the following article.

It is now well over ten years since blockchain – or distributed

ledger technology (DLT) – appeared on the financial services landscape

but it is still capable of generating excitement as its value in

transforming processes continues to develop.

Heading into a new decade, the potential this technology has to

create significant efficiencies in the handling of payments and customer

data is opening up new avenues for opportunity.

In Cayman, where we see a healthy insurance industry alongside a boom

in emerging technology companies, attracted by the tax neutrality and

business-friendly regulation which have traditionally drawn hedge funds

and other businesses to these shores, there are many opportunities for

captive insurance companies to provide insurance to businesses which are

operating in the blockchain sector.

Some 200+ technology companies have established a presence of some

sort in Cayman in the last two to three years and this, in turn, has

created an opportunity for Cayman’s insurance community. Disruptive

technology companies have often found it a challenge to get insurance,

and Cayman’s DLT developers have been no exception. Some Cayman-based

technology companies have expressed interest in buying insurance,

whether that is D&O (directors and officers) liability or other

types of coverage, from local players.

In addition, as blockchain increases its reach and the impact that it

is having in specific industries grows, there will be a related need

for suitable models of insurance. For instance, the efficiencies that

the technology presents for record-keeping and payment-processing, mean

that it is already having a significant impact on the global healthcare

industry.

Cybersecurity and data protection are huge issues for the healthcare

sector and, while it presents challenges on this front, DLT could also

become a part of the solution. Blockchain technology and its

compatibility with data protection laws remains an issue, but there is

confidence that a solution will be found and, if this is not achieved

technologically, then regulation may need to adapt to new and future

realities.

As we head into 2020, with lawmakers and regulators, globally and in

Cayman, starting to address some of these issues, we hope to see the

adoption of a suitable framework to assist technology companies, and

their insurance providers, to continue making advancements in the

development of this exciting and increasingly useful technology.