Category: Blockchain insurance · Reviewed by Simon Temme, Account Executive · Last reviewed 2026-06-10
Blockchain insurance describes the application of distributed ledger technology (DLT) and associated smart contracts to the issuance, accounting, settlement and reinsurance of insurance contracts.
Blockchain in insurance is not a separate class of business. It is a record-keeping and execution technology that can sit beneath conventional contracts of insurance. The legal and regulatory status of any policy written, ceded or settled on a distributed ledger is determined by the underlying contract and by the FCA / PRA regulatory perimeter, not by the ledger itself.
Definition
A blockchain is an append-only, cryptographically linked sequence of data blocks shared across multiple nodes. In insurance, distributed ledger technology has been used to:
Record cessions and accounting flows between insurers, reinsurers and brokers;
Trigger settlement of parametric covers by reference to oracle data feeds;
Share Know-Your-Customer and Anti-Money Laundering documentation between counterparties;
Notable industry initiatives include the B3i consortium, the RiskStream Collaborative (formerly the RiskBlock Alliance) operated by The Institutes in the United States, Insurwave (the marine consortium led by EY, Guardtime, Maersk, Microsoft and ACORD), and the open-source Etherisc Generic Insurance Framework.
Legal / Regulatory basis
There is no bespoke “blockchain insurance” regime in the United Kingdom. The applicable framework is the existing one for insurance and, where relevant, for cryptoassets:
Financial Services and Markets Act 2000 (FSMA 2000) and the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544, which define “contract of insurance” and the regulated activities of effecting and carrying out contracts of insurance.
Financial Services and Markets Act 2023, which extended the FCA perimeter to certain cryptoassets and provided the legislative architecture for HM Treasury’s “Future Financial Services Regulatory Regime for Cryptoassets” (February 2023; final response, October 2023).
FCA Policy Statement PS19/22, “Guidance on Cryptoassets” (July 2019), which sets out the FCA’s taxonomy of exchange tokens, security tokens and utility tokens.
PRA Statement of Policy on operational resilience (SS1/21 / PS6/21) and on outsourcing and third party risk management (SS2/21), which apply where ledger-based services are provided to PRA-authorised insurers.
EIOPA Discussion Paper on Blockchain and Smart Contracts in Insurance (2021, follow-up 2023), which surveys use cases and supervisory expectations in the EEA.
UK Jurisdiction Taskforce, Legal Statement on Cryptoassets and Smart Contracts (November 2019), endorsed in AA v Persons Unknown [2019] EWHC 3556 (Comm), which confirmed that cryptoassets can be treated as property under English law.
The Bank of England, PRA and FCA jointly launched the Digital Securities Sandbox in 2024, a financial market infrastructure sandbox that permits regulated firms to test DLT-based issuance and settlement of securities, including insurance-linked securities, within a modified rulebook.
How it works in practice
Insurers and brokers typically deploy DLT in one of three architectures:
Permissioned consortium ledgers (for example Corda used by B3i and RiskStream) — only invited firms run nodes; transactions are private to the parties; finality is by notary consensus. These suit reinsurance accounting and KYC.
Permissioned enterprise ledgers (for example Hyperledger Fabric used by Insurwave) — channel-based privacy; suited to consortium use cases with shared business logic.
Public ledgers (Ethereum, Polygon, Avalanche) — open participation; suited to parametric DeFi-style products such as those issued via Etherisc and Arbol.
In each case the underlying insurance contract is still a contract between an authorised insurer (or its managing general agent) and the insured, governed by ICOBS where the customer is a UK consumer or commercial policyholder.
Common variations / Subsequent developments
Parametric oracle settlement — see parametric insurance, where DLT smart contracts execute payouts when oracle data (rainfall, wind speed, flight delay) crosses a threshold.
Syndicated reinsurance accounting — B3i and RiskStream piloted property catastrophe excess-of-loss treaties and shared loss-run data; see distributed ledger reinsurance.
Tokenisation of insurance liabilities — see token-based insurance and the Digital Securities Sandbox.
B3i Services AG itself entered liquidation in July 2022 after failing to secure follow-on funding; several of its protocols were open-sourced. RiskStream Collaborative remains operational. The shift since 2022 has been away from consortium platforms and toward narrower, production-grade applications, particularly in marine, parametric agriculture and ILS.
Example
A UK-authorised reinsurer cedes a quota share of its UK property book to a Bermuda-domiciled reinsurer. The cession is recorded on a Corda-based ledger shared between the cedent, the reinsurer and the broker. Premium and loss bordereaux are reconciled automatically; settlement flows are recorded on the ledger but executed through correspondent banks in sterling and US dollars. Although the ledger is the system of record, the contract of reinsurance is a conventional reinsurance treaty governed by English law, and the cedent’s regulatory capital treatment is determined by the PRA’s Solvency II rules — not by the ledger.
Financial Services and Markets Act 2000 (legislation.gov.uk).
Financial Services and Markets Act 2023 (legislation.gov.uk).
FCA, Guidance on Cryptoassets — Policy Statement PS19/22 (July 2019).
HM Treasury, Future Financial Services Regulatory Regime for Cryptoassets — consultation (February 2023) and response (October 2023), gov.uk.
Bank of England, PRA and FCA, Digital Securities Sandbox — joint consultation and final policy (2023–2024).
EIOPA, Discussion Paper on Blockchain and Smart Contracts in Insurance (2021; follow-up 2023), eiopa.europa.eu.
UK Jurisdiction Taskforce, Legal Statement on Cryptoassets and Smart Contracts (November 2019), lawcommission.gov.uk.
AA v Persons Unknown [2019] EWHC 3556 (Comm).
PRA, SS1/21 and PS6/21 on operational resilience; SS2/21 on outsourcing and third party risk management.
IAIS, Issues Paper on Cyber Risk to the Insurance Sector (2016) and Application Paper on Cyber Risk Underwriting (2020), iaisweb.org.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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