On October 16, 2019, Hunton Andrews Kurth insurance lawyers Michael S. Levine and Daniel Hentschel discussed insurance coverage issues concerning blockchain technology and cryptocurrencies in an article published by IRMI (Insurance Risk Management Institute, Inc.). The full article is available here. In the article, the authors discuss the potential risks associated with the use of the revolutionary technology and the potential coverage gaps that may arise in certain insurance policies.

 

Insurance giant Allianz Global Corporate & Specialty S.E. announced yesterday that it has launched a blockchain prototype for a global captive insurance program. The project focuses on professional indemnity and property insurance for a customer with a captive insurance program with local subsidiaries in the U.S., China and Switzerland. Captive programs are complex programs used frequently by multinational organizations to self-insure their risks. These organizations create their own self-insurance programs, or ‘captives,’ which aggregate assets or insurance exposures from their global operations.  The programs collect premiums from each operating unit much like an ordinary insurer.  The captive entity likewise pays out claims as they arise. Allianz administers the captive insurer as a “fronting insurer,” using the insurer’s diverse multi-national network to ensure global reach and compliance.  Blockchain technology automatically connects all parties involved in the insurance program by using its distributed ledger technology, which is shared among all program participants and can record transactions and data entries. Updates and changes to the data are shared in real-time across all users. This creates a much faster, transparent, secure and efficient means of distributing information, conducting business processing and recording transactions across multiple parties.

Continue Reading Allianz Launches Blockchain Prototype

In prior posts (here and here), we have highlighted some potential coverage concerns for losses arising out of the use of blockchain technology. However, as previously reported, Blockchain technology’s relevance to insurance is not limited to coverage for losses. In fact, earlier this week, the Blockchain Insurance Industry Initiative known as B3i expanded its membership to include heavyweight insurance companies like Chubb, AIG, and Gen Re as well as notable insurance and reinsurance brokers like Marsh, Guy Carpenter, Willis Re, and JLT Re.

Continue Reading Blockchain Insurance Industry Initiative (B3i) Grows

In an article in the September issue of ABA Business Law Today, Hunton & Williams attorneys Lorie Masters, Sergio F. Oehninger, and Patrick McDermott discuss the increasing use of blockchain technology, the security of the technology, and insuring against the relevant risks. As they explain, the “potential disruptive uses of blockchain technology in the marketplace have been compared to that of the Internet.” Thus, businesses across industries should consider their insurance would cover risks arising out of the use of blockchain technology. The authors point out that current cyber insurance coverages leave unanswered questions about the extent of coverage for such risks.

Consulting firm Ernst & Young recently announced that it is collaborating with Microsoft, data security firm Guardtime, and shipping and logistics conglomerate Maersk to create a marine insurance platform based on blockchain technology. The companies anticipate that their blockchain-based product—to be implemented globally beginning in early 2018—will connect clients, brokers, insurers, and third parties to “distributed common ledgers that capture data about identities, risk and exposures” and integrate this information with insurance contracts. The platform’s capabilities include: “the ability to create and maintain asset data from multiple parties; to link data to policy contracts; to receive and act upon information that results in a pricing or a business process change; to connect client assets, transactions and payments; and to capture and validate up-to-date first notification or loss data.”

Continue Reading Multi-Disciplinary Team Announces Blockchain-Based Marine Insurance Platform

Effective Date: June 1, 2021


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Beginning last Friday, and still occurring today, one of the worst and most widespread malware attacks has impacted more than 200,000 victims in at least 150 countries, including Britain’s National Health Service, FedEx, telecommunications companies Telefonica and Megafon, and automakers Renault and Nissan. The malware, known as “WannaCry,” disables the user’s computer system and all of its data. A note in a text file then appears stating that in order to unlock the computer, $300 worth of the digital currency bitcoin must be paid to the hackers. A countdown timer appears and the fee increases with time. The hackers threaten to delete all data on the computer system if payment is not sent within one week. Cybersecurity experts believe that the malware was sent to computers through “phishing attacks,” which are emails that appear to be from reputable sources and include a download to a link that allows the malware to infect the computer. From these computers, the malware then spread to other computers on the network. One infected computer can spread this virus network-wide, and quickly.

Continue Reading If You Don’t “WannaCry” After A Cyber Attack, Review Your Cyber Insurance Coverage