At the end of July 2022, the international consortium of 21 insurers and reinsurers behind the Swiss company B3i, which was supposed to develop blockchain-based insurance solutions, filed for bankruptcy after failing to find profitability. The beginning of the end of El Dorado?
Clouds are assembled on the blockchain. Just yesterday, a breakthrough technology, put in every way and declared ready to revolutionize all sectors of the economy, in particular with its smart contracts (finance, trade, insurance, energy, etc.), the blockchain is at a key moment in its development.
Blockchain is no longer as popular as it was in the late 2010s…
Its technological principle – the creation of a decentralized and in principle tamper-proof database – remains promising and can find as many applications as usefulness.
But the computing power required to create a complex blockchain is a serious thorn in the side of the energy transition and energy access crisis in the West.
Crypto winter is coming…
Blockchain’s main showcase, the crypto ecosystem, is also on the brink of change, rocked by a rare crisis dubbed the “crypto winter,” which is causing bankruptcies, layoffs, and the collapse of the network. The value of NFTs and cryptocurrencies is plummeting and several professionals in the sector have gone out of business.
As for other possible applications of blockchain, after the late 2010s eruptions, radio silence is par for the course. The global economic crisis caused by Covid-19, chained by the current energy crisis, has brought order to investors’ priorities.
half mast investment
Betting on such a technology, certainly promising, seems irrelevant now, since the blockchain does not provide any services that older technologies cannot provide, it simply makes them more secure and reliable.
The repeated thefts that have affected the crypto sector in recent months have likely also not helped the tech’s reputation and may have helped deter some investors.
B3i Services, which should develop blockchain in insurance, files for bankruptcy
Promises of the spread of smart contracts in trade, energy and finance have remained a dead letter. As a symbol on July 28, 2022, it was insurance, the sector considered most favorable for blockchain, which ended up throwing in the towel.
An international consortium of 21 insurers and reinsurers that created the Swiss company B3i Services to develop blockchain-based insurance solutions has filed for bankruptcy.
Three fundraisers in 2018, 2019 and 2020 and… nothing else
Let’s go back to the beginning of the story. In 2016, a consortium of 15 insurers and reinsurers (including (Allianz, Munich Re or Swiss Re) was formed to work on the blockchain. This led to the creation of B3i Services in 2018. Then another ten market players joined the project. , in including Aksa.
In 2018 and 2019, B3i held two fundraisers totaling around 23 million euros. The amount of the third round of funding in 2020 was kept secret. The company has since launched new fundraisers, all of which ended in failure.
B3i has been developing solutions to automate insurance processes using blockchain to make them more efficient, faster and more profitable, in particular through smart contracts. Some technologies were also integrated into the Swiss Re and Allianz product in April 2022.
“Perhaps at some point someone will find the right formula”
Despite these successes, profitability was too far off. And the consortium chose to give up. “I think it was a quality job, but in the end we didn’t feel like the volumes and demand justified continuing to invest in this platform,” Swiss Re’s CFO said.
In order not to completely close the coffin of the blockchain in the world of insurance, he added: “I believe that this concept remains very interesting for the sector. Maybe at some point someone will find the right formula. But so far, with this platform, we were not going to find profitability.”
Is it better to disappear in order to come back stronger? Is blockchain preparing us for a comeback worthy of a Marvel villain? Why not… But for now, we wouldn’t bet our savings on it (especially if it’s in bitcoins)…