Real World Insurance Application of iXBRL with Hyperledger Blockchain Technology

Dennis Knochenwefel CEO, Reportix

Reportix

• Founded in 2017 • Focus: Advanced data management and analytics solutions for XBRL • References:

Prof. Dr. Philipp Sandner

Prof. Dr. Alexander Braun

Prof. Dr. Frederik Armknecht

• Blockchain Research Partners:

What is Blockchain?

Tamper-proof distributed ledger.

Verifiable, immutable, traceable

Ledger = transactions &

states

No centralized authority = “trustless”

What does Blockchain solve?

With DLT: consistent, efficient, reliable, transparent,

immutable

Read-Write

Read-Write

Read-Write

Read

Data A

Data B

Data C

Data D

Without DLT: inconsistent, expensive, inefficient,

questionable

Creates Trust in an environment of mistrust

Crypto-

Currencies

Smart Contracts

Distributed Ledger Technology

Distributed Database

Database Management System

Classification of Blockchain Technology

Adapted from Dr. Udo Milkau, DZBank, 4/2017: „Blockchain im Banking – von BitCoin bis „Beyond Blockchain““

Blockchain

Spec

ializ

atio

n

Breadth of Functionality

Types of Applications

•send value from A to B •data: values •most mature •very good for cross border remittance

•example:

•manage simple values •supports simple business logic

•very good for simple use cases that need blockchain characteristics

•example:

•manage complex data •supports complex business logic

•very good for complex use cases that need blockchain characteristics

•example:

Payments (since 2008)

Smart Contracts (since 2013)

Immutable Database (since 2015)

EverContract

What is the problem with Smart Contracts? Part 1

On-Ledger

Immutable “Transaction-Data”

Blockchain Implementation Example:

Advantage: + Immutable / unstoppable execution Disadvantage: - Immutable / unstoppable execution

contradicts implied covenant of good faith and fair dealing

What is the problem with Smart Contracts? Part 2

“Introduction to Smart Contracts”, http://solidity.readthedocs.io/en/develop/introduction-to-smart-contracts.html

Smart Contract example

Smart Contract = Smart + Contract ???

iXBRL as an Extensible Smart Contract (Ricardian Contract)

Advantages: + Readable by non-programmers + Looks like a normal contract / report / form + Machine readable embedded “tagged” data + not proprietary!

Example iXBRL „Ricardian Contract“

Smart Contract = Smart + Contract

Implementation based on Hyperledger

Hyperledger project, https://www.hyperledger.org/about/members

EverContract: Extensible Smart Contracts

EverContract

Smart Contract: - Validation - Verification - Evolution - Incidents - Analytics - Processing

Insurance Policy Registration Form Report Content: - Legal Prose - Facts - Documentation - Data Definitions - Validation Code - Verification Code - Processing Code - Inheritance - Modularization

EverContract Architecture

Cf.: http://www.daniel-rehbein.de/bildschirmtext.html http://personofinterest.wikia.com/wiki/ARPANET_Outage_Data_Breach

US: ARPANET

AT-D-CH: BTX

Blockchain without standardized Data is like the Internet without HTML

!

Why XBRL?

Cf.: Moritz Gerdes, Comdirect, 4/2017: „Hype oder Game-Changer? Blockchain-basierte Innovationen und Zukunftsszenarien“

So, what’s the real world application???

The 2 year Project

Prof. Dr. Philipp Sandner Head of Blockchain Center, Frankfurt School of Finance & Management

Supported by:

Added Value for a future Insurance ecosystem

The Insurance Market becomes individual and dynamic

Blockchain: Creating trust in a dynamic world XBRL: Creating interoperability with Standards-based Technology Market Reach: 75% in Germany

Summary

Uses XBRL to: • create efficient data exchange • governed, high quality,

validated data collection Could profit from blockchain to: • create trust • create a single source of truth • create immutable data

collection

Uses Blockchain to: • create trust • transparency • efficiency across multiple

entities Can profit from XBRL to: • create legally sound documents • Non-proprietary data exchange • Ricardian Contracts

Regulatory World Operative World