Category: Blockchain insurance · Reviewed by Amy Price, Account Executive · Last reviewed 2026-06-10
Distributed ledger reinsurance is the use of permissioned blockchain platforms to record, reconcile and settle reinsurance cessions, premium flows and loss bordereaux between cedents, reinsurers and brokers.
Reinsurance accounting is one of the most paper-intensive parts of the insurance value chain. Distributed ledger pilots have sought to compress reconciliation cycles from weeks to minutes. The reinsurance contract itself, and the PRA’s prudential expectations of cedents and reinsurers, are not changed by the use of a ledger.
Definition
Distributed ledger reinsurance refers to the application of permissioned DLT — typically R3 Corda or Hyperledger Fabric — to:
Bordereau exchange (premium and loss);
Treaty and facultative placement workflows;
Cessions calculation and accounting;
Cash settlement instructions to correspondent banks;
Claims notification and adjustment status; and
Catastrophe event triggers for parametric reinsurance.
The leading historical pilots were the B3i Property Catastrophe Excess-of-Loss reinsurance prototype (2017–2019), the RiskStream Collaborative (operated by The Institutes), and individual private deployments at major reinsurers including Swiss Re, Munich Re, SCOR and Hannover Re.
Legal / Regulatory basis
A reinsurance contract is a contract of insurance between two insurers. Its regulation in the UK rests on:
Financial Services and Markets Act 2000 and SI 2001/544 — the regulated activity of effecting and carrying out contracts of insurance includes reinsurance.
PRA Rulebook, in particular the Solvency II Firms Sector, which preserves Solvency II requirements for technical provisions, risk margin, the Standard Formula and Internal Models.
PRA SS5/16, Recognition of external credit assessment institutions; SS31/15, The Internal Model approval process; and the PRA’s expectations on the use of reinsurance for capital relief.
PRA SS2/21, Outsourcing and third party risk management — directly relevant where ledger infrastructure is provided by a third party.
PRA SS1/21 and PS6/21, Operational resilience — requiring identification of important business services and impact tolerances.
EIOPA Discussion Paper on Blockchain and Smart Contracts in Insurance (2021; 2023) — covers reinsurance accounting use cases.
EU Regulation 2022/2554 (DORA) — applicable to EEA reinsurance entities from 17 January 2025; relevant to UK groups with EEA subsidiaries.
The substantive contract law applicable to reinsurance — the Insurance Act 2015, the Marine Insurance Act 1906 in marine reinsurance, and English common law — applies regardless of whether the contract is recorded on a ledger.
How it works in practice
In a typical pilot architecture:
The cedent’s policy administration system writes risk data to a node it controls on a Corda or Fabric network.
The reinsurer’s node reads the data under permissioned access, runs treaty terms, and computes the cession.
The broker’s node acts as notary or intermediary, observing flows and providing reconciliation.
Periodic settlement is computed on-ledger; sterling, US dollar and euro flows are executed through correspondent banks, with confirmations written back.
Loss events trigger updates to the cession state, and where the treaty is parametric, automatic state transitions to “loss notified” or “loss agreed”.
For the cedent’s Solvency II capital calculation, the reinsurance recoverable is recognised in the usual way, subject to counterparty default risk and any provisions in the Internal Model.
Common variations / Subsequent developments
Property Catastrophe XL — the B3i pilot of 2017–2018, involving Allianz, Munich Re, Swiss Re and Zurich, demonstrated end-to-end treaty reconciliation on Corda.
Surety bonds — RiskStream’s Surety Working Group developed a shared bond verification register.
Marine reinsurance — building on Insurwave’s primary marine cover.
Insurance-linked securities — see token-based insurance and the Digital Securities Sandbox.
Wind-down — B3i Services AG entered liquidation in July 2022. Its protocols were partly open-sourced and several use cases migrated to private deployments. RiskStream Collaborative remains operational as of 2026.
The market direction since 2022 has been toward modular, production-grade tools — for example, smart contract templates issued by ACORD and bilateral cedent-reinsurer ledgers — rather than industry-wide consortium platforms.
Example
A composite insurer cedes 40% of its UK property book to a panel of three reinsurers on a quota-share basis. The bordereaux, which previously circulated by spreadsheet, are written to a shared Corda network. Premium reconciliation, which previously took six weeks, completes within 48 hours. When Storm Esme produces 1,800 household claims, the cedent uploads loss data; the cession to each reinsurer is computed automatically, and a single settlement instruction is generated. The reinsurance contracts remain governed by English law; the cedent’s PRA reporting is unchanged; and the cedent’s SAO actuary signs off the technical provisions in the usual way.
Financial Services and Markets Act 2000 and FSMA (Regulated Activities) Order 2001, SI 2001/544.
PRA Rulebook, Solvency II Firms Sector.
PRA, SS5/16, SS31/15, SS2/21 and SS1/21; PS6/21.
EIOPA, Discussion Paper on Blockchain and Smart Contracts in Insurance (2021; 2023), eiopa.europa.eu.
Regulation (EU) 2022/2554, Digital Operational Resilience Act (DORA), eur-lex.europa.eu.
B3i Services AG, Property Catastrophe XOL prototype white paper (2018).
The Institutes RiskStream Collaborative, working group publications.
Insurance Act 2015 and Marine Insurance Act 1906 (legislation.gov.uk).
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
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