Blockchain Innovation in Surety Bond Industry: A Case Study on The Institutes RiskStream Collaborative®

The Institutes RiskStream Collaborative® is the risk management and insurance industry’s first enterprise-level blockchain consortium. It brings together experts and developers to advance insurance-specific use cases via Canopy, a custom blockchain architecture running on Kaleido's digital transformation platform. The RiskStream Collaborative is committed to equipping organizations to work together to inspire product innovation, enable efficiencies, and open new technological frontiers. The consortium has a broad range of members, including carriers, producers, reinsurers, and non-members, all of whom have been involved in the early stages of the Surety Labs.

The Institutes RiskStream Collaborative®, the largest enterprise-level blockchain consortium in the risk management and insurance industry, identified a significant challenge in the surety industry. The industry is characterized by multi-party data verifications and exchanges between the principal, obligee, and surety, which often leads to inefficiencies and complexities. The Surety Bonds Power of Attorney use case was identified as a starting point to address these issues. However, the process of enabling real-time bond signature and verification, which is crucial to the overall solution, was fraught with difficulties, including high costs, time consumption, and risk.

To address these challenges, The Institutes RiskStream Collaborative® announced plans to advance its international efforts on the Surety Bonds Power of Attorney use case and launch a new lab for the Surety industry. The new Bond Signature and Verification lab, set to launch in the fall of 2021, aims to streamline the bond verification process using blockchain technology. The initiative is facilitated by RiskStream Labs, a blockchain innovation hub designed to accelerate innovation across various sectors. The Surety initiative has garnered support from international surety associations and key industry players, including carriers, producers, and reinsurers. The solution leverages Canopy 3.0, a custom blockchain architecture running on Kaleido's digital transformation platform, to provide a range of blockchain-based tools, technologies, and services.

• The implementation of the blockchain solution by The Institutes RiskStream Collaborative® is expected to bring about significant transformation in the surety industry. The use of blockchain technology in the bond verification process is anticipated to greatly reduce the time, cost, and risk associated with multi-party data verifications and exchanges. The solution also allows for the early involvement of obligees in the design conversations, as they are the ultimate beneficiaries of the global solution. The collaboration and participation in the Surety Bonds – Power of Attorney Verification working group indicate that the industry is ready for transformation, and the consortium is actively recruiting and onboarding companies for both working groups.