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How well do we do on the scale of sustainability?
The Management Committee’s charter for our working group was officially completed in 2020 after we successfully “incubated” the use case for bonds and powers of attorney. We then found and selected RiskStream Collaborative, a non-profit consortium, to take the idea to proof of concept, and, if successful, to production. In 2021 the activity of our working group was shifted to workshops facilitated by RiskStream, at no cost to ICISA or its members. I appreciate the opportunity to share with you the tremendous progress that has been made since that time.
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The interest and engagement in our blockchain initiative globally is unprecedented, thanks to ICISA’s leadership and vision to make this an inclusive and collaborative effort. Knowing that multiple blockchain initiatives could spread ICISA member company resources thin, ICISA leaders reached out to other surety industry trade associations and invited them to join ICISA in focusing first on powers of attorney and bonds. The Surety and Fidelity Association of America (SFAA), the National Association of Surety Bond Producers (NASBP), the Pan American Surety Association (PASA) and the Canadian Surety Association agreed, and joined ICISA in working with the RiskStream Collaborative to build out the use cases for powers of attorney being on the blockchain, followed by bonds.
Four virtual workshops were conducted in February through May, with nearly 350 participants attending the first workshop! Over the course of the four workshops 173 separate entities participated, including 63 sureties, 5 reinsurers, 83 agencies/ brokerages, 8 industry associations, the Small Business Administration (a department of the US government), a number of system solution providers and CPAs, and one university. The Greg Davenport Chair of the Surety Blockchain Working Group Company: Liberty Mutual
workshops focused on powers of attorney. Though POAs are not attached to bonds in Europe, the ICISA blockchain working group agreed it was best to start smaller with POAs and then build upon that effort to add surety bonds to the blockchain. At the end of the workshops it was agreed to take the POA use cases to build a proof of concept. The proof of concept for POA will kick off on October 21st and is expected to take about 4 months. Participating sureties should expect to attend 2 meetings a month virtually, and we are told that technical resources should not be required. While RiskStream Collaborative facilitated the four workshops at no cost to ICISA or its members, the proof of concept requires that participants other than the 5 associations share “cost coverage” for the blockchain solution provider, Kaleido. RiskStream is not for profit so there is no markup for their services, which are covered instead by member dues. Consequently, the cost for ICISA members who belong to the consortium is less than 25% of what was expected had a separate consortium been created by ICISA members alone. For those who do not belong to the consortium, the cost to participate in the proof of concept is less than one business class ticket between Europe and the United States. have the bonds themselves on the blockchain, we strongly encourage participation to keep the momentum up, and for ICISA members to anticipate a bond proof of concept phase in 2022 with “cost coverage” required. With broader interest in the bond phase, the cost of the bond POC, per participant, should be even lower.
As of September 1st, 10 major sureties have committed to participate in the proof of concept for powers of attorney. These sureties wrote over $3B USD in direct written premium in 2020. Additionally, 4 brokers, including a major global broker are participating, as well as a leading surety system solution provider for agents, brokers and carriers. The 5 global trade associations, including ICISA, will also participate in the POC, free of charge, to assure that member interests are represented. There is still time to register for the power of attorney proof of concept. Email Sandy Hampel at RiskStream Collaborative. Her email is hampel@ theinstitutes.org.
Even with the modest cost-coverage required for the POA proof of concept, the interest of most ICISA members in Europe, Canada, Latin America and Asia-Pacific is in having bonds on the global surety blockchain. In the interest of ICISA members, Patrice Luscan, Rob Nijhout, Richard Wulff and I worked with RiskStream Collaborative to find a way to accelerate the surety bond phase of the global blockchain initiative. As a result, RiskStream announced in an August press release the launch of the new Bond Signature and Verification Lab in the fall, before the POA proof of concept is even complete. Phase 1 of the Surety Bond Lab will begin in November 2021, only a month after the POA proof of concept begins. As with the POA workshops, these sessions will be free of charge and open to anyone interested. RiskStream expects to host 3 virtual workshops over three months. This phase is being run concurrently with the POA proof of concept to maintain the engagement of ICISA members and other participants that are not involved with the POC. Since “the end game” for the global surety blockchain initiative is to
