Norton Rose Fulbright and R3 launch white paper on application of blockchain and distributed ledger technology in the insurance sector

Global Knowledge April 25, 2017

  • As a sector, the insurance industry is particularly well placed to benefit from distributed ledger technology and applications enabled by it, such as smart contracts
  • The automation and digitization of the insurance value chain through these technologies has the potential to lead to value creation through the development of innovative new products and new business models, which could prove revolutionary to the industry

Digitizing the insurance value chain through the use of blockchain or other distributed ledger technologies (DLTs) has the potential to revolutionise the insurance sector, according to a new whitepaper prepared by global law firm Norton Rose Fulbright in association with financial innovation firm R3.

The Norton Rose Fulbright-R3 white paper illustrates potential use cases for DLTs in the insurance sector and examines the legal, regulatory and commercial factors that the industry should consider before deploying such technologies.

Macroeconomic factors, regulatory requirements and a soft market have focused insurance market participants on investing in new and developing technologies (including DLT) with the aim of reducing costs, increasing competitiveness and profitability, and improving customer experience.

Insurance value chains involve multiple market participants who share and transact on the basis of a huge amount of data. A significant industry issue is the maintenance of multiple records of the same data within the same business for use in different aspects of the lifecycle of the insurance of the same underlying risk or book of business. This data requires reconciliation and verification. DLT has the potential to remove the inefficiencies associated with reconciliation and verification of siloed data by facilitating shared control of transaction specific data which is available to all (or selected) participants in the relevant network and can be updated almost in real time.

When combined with smart contracts and information fed into the distributed ledger by IoT (Internet of Things) devices and other open data sources, DLT can automate and streamline significant parts of the insurance value chain, from the acceptance of risk through to policy administration, payment of claims and regulatory oversight. This level of automation will reduce inefficiency and error and has the potential to lead to an improvement in customer outcomes, through more responsive insurance products with a higher degree of certainty of outcome.

Perhaps as exciting as the benefits of digitizing the value chain through DLT and smart contracts, is the potential for innovative new products and new business models to be developed, which could prove revolutionary to the industry.

To realise the true value of DLT and DLT-enabled applications across the insurance industry, those looking at the technology must avoid getting drawn into a siloed approach. Incumbent insurance players will need to collaborate with technology firms and other organisations. Collaboration with regulators will also be necessary to ensure that regulatory frameworks evolve in step with the direction of travel of the industry.

Nicholas Berry, who led the Norton Rose Fulbright team that drafted the white paper commented: “We are delighted to publish this white paper on distributed ledger technology use cases in the insurance sector in association with R3. Distributed ledger technology itself, and as an enabler of other complementary technologies, has the ability to revolutionise insurance products and services and the way in which insurance business is transacted.  The shift in thinking as industry players open their minds to ways in which traditional market processes can be transformed through new technologies is gathering momentum.” 

Sean Murphy, Global Head of the Distributed Ledgers, Blockchains and Smart Contracts practice at Norton Rose Fulbright, said: “Because the insurance sector is characterised by legacy systems that are expensive to maintain, distributed ledger technology raises the prospect of being able to implement transformational business change in the sector while at the same time achieve cost savings. The insurance sector is but one of a number of sectors where the technology could have this impact.”

David Rutter, CEO of R3 commented: “Distributed ledger technology (DLT) has enormous potential for the insurance industry, not least to change the way insurers manage and utilise data. R3 now counts a number of insurance companies amongst its member base and we are exploring and developing applications that improve the efficiency of insurance processes such as claims handling and premium payments. In order to further our efforts, we recently launched a Centre for Excellence for DLT in partnership with ACORD to encourage knowledge sharing and collaborative working amongst the global insurance industry.”

Norton Rose Fulbright recently published, in association with R3, Can Smart Contracts be Legally Binding Contracts?.

R3 leads a consortium partnership with over 80 of the world's leading financial institutions and regulators. They work together to design and deliver advanced distributed ledger technologies to the global financial markets.

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For further information please contact:

Louise Nelson, Senior PR Manager
Tel: +44 (0)20 7444 5086; Mob: +44 (0)7909 684 893

Notes for editors:

Norton Rose Fulbright

Norton Rose Fulbright is a global law firm. We provide the world’s preeminent corporations and financial institutions with a full business law service. We have more than 3500 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Norton Rose Fulbright will combine with Chadbourne & Parke, a leading international law firm, during the second quarter of 2017. Norton Rose Fulbright's expanded practice will have more than 1000 lawyers in the US and 4000 lawyers worldwide.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright Verein, a Swiss verein, helps coordinate the activities of Norton Rose Fulbright members but does not itself provide legal services to clients. Norton Rose Fulbright has offices in more than 50 cities worldwide, including London, Houston, Toronto, Sydney and Johannesburg. 

For more information, see


R3 is leading a consortium with over 80 banks, clearing houses, exchanges, market infrastructure providers, asset managers, central banks, conduct regulators, trade associations, professional services firms and technology companies to develop groundbreaking commercial applications of distributed ledger technology for the financial services industry.

Operating in nine countries from all regions of the world, the R3 team is made up of financial industry veterans, technologists, and new tech entrepreneurs, bringing together expertise from electronic financial markets, cryptography and digital currencies.


Global head of FinTech