A blockchain-sector company is in the process of incorporating in Bermuda.

The technology enterprise is likely to have some staff based on the island to run back-office functions. It will build blockchain applications for the financial industry, and it sees opportunities to do business with Bermuda’s insurance and reinsurance sector.

DrumG is a spin-off from R3, a high-profile New York company researching and developing blockchain technology.

Bermudian-based Stafford Lowe, who worked for R3, is chief administrator for DrumG and he sees great potential for the technology, and also for Bermuda to benefit from a blockchain-focused start-up establishing itself here.

Blockchain is an online distributed ledger, best known for supporting bitcoin, the digital currency. However, the architecture of distributed ledger technology has the potential to be applied across many aspects of the financial-services industry and beyond.

“We will have teams in London, New York, Singapore and Bermuda,” he said. “Reinsurers could very well become clients.”

The enterprise has maintained a close relationship with R3. Mr Lowe said DrumG would work with business clients as well as end users. “Customers will license a platform, which will provide all the security and scalability they need.”

Blockchain eradicates the need for double-entry bookkeeping, speeding up processes and potentially saving billions of dollars across industries.

It can be used by groups of companies that do business with each other to create shared databases, doing away with the need for all of them to store the same information, and it can provide a reliable and secure way to trace the most updated data in a system.

“It streamlines how these businesses transact and cuts out steps along the way. You can ask businesses where are their pain points,” Mr Lowe said.

“We will be able to create automation around sharing information. Creating an app that is configurable for each individual user.”

Mr Lowe sees potential innovations helping streamline aspects of the ILS market, adding: “Anything that involves lots of paperwork is fair game. A lot of it boils down to cutting out paperwork.

“If everything comes together we will start with 18 to 20 people in different countries, with four specific applications. It is not about one application; it is based around open architecture.”

Mr Lowe is married to a Bermudian and lives on the island. He said: “Our goal in Bermuda is to run a central back office here. We believe there is a role to play for Bermuda.”

He said the venture has met with a positive response and he would like DrumG to become a poster child for more start-ups to come to Bermuda.