Insurtech and fintech are reshaping how businesses interact and also bringing to an end many time and labour-intensive office processes.

Within the insurance sector, one example is the reconciliation of funds received with transactions.

In practical terms, that could mean removing the need for someone to walk around an insurance office with a bank statement to find out who is awaiting the cash, or portions of it, to fulfil transactions.

We are now in what has been described as the second digital wave, where the exchange of data is being automated and integrated within organisations’ processes.

That streamlining does not necessarily mean job losses, but instead represents opportunities for staff to focus on other, more valuable and rewarding tasks.

That’s the view of Graham Card, a senior management consultant with Web Connectivity Ltd, which provides technology-enhanced services to clients in the insurance and reinsurance sector.

Speaking to The Royal Gazette about developments in the insurtech and fintech space, he said one of the good things that is happening with blockchain and insurance is that the Acord standards are accepted as the structured data standard for delivering the outcome of blockchain calculations.

Acord, the Association of Co-operative Operations Research and Development, was created in 1970 and provides the insurance industry with data standards, implementation solutions, standardised forms and messaging system. Its widely implemented standards have streamlined the handling and exchange of data between trading partners.

With the arrival of blockchain, that process is being further streamlined with the aim of eliminating time and labour-intensive paper insurance certificates that have been prevalent in the industry.

Job losses as a result of automated advances in automation are not a certainty.

It would free staff up from the need to do many paper-related processes. Mr Card said: “There is more a refocusing of people’s roles and responsibilities to value-added tasks.”

He added: “We are now into the second digital wave. In the first wave it was convincing people that rather than exchanging paper you exchanged data. The second wave is them saying ‘how do we use that data in an automated, integrated fashion within the organisation’s processes’.”

Mr Card believes that for Bermudian-based insurers and reinsurers, such technology advances are compelling.

“Typically, reinsurers on the island are looking to run their support processing at relatively low cost in relation to their underwriting capability, and the more they can make processes more efficient and less manual, the better. We like to fit into that space,” he said.

WCL has completed a collaboration with a fintech company to bring in a new service it calls EnabledCash, providing a “relevance and an interface” between bank statement and an insurer or reinsurer’s ledger system.

“Typically, the allocation of cash from bank to ledger is manual; the insurer or reinsurer will print the statement from the bank and walk around their office and ask who recognises this money from company A, or company B or company C,” said Mr Card.

“Because the money in relation to our processes is underpinned by data, we are sharing that data — with client permission — with Fennech, a fintech company, and they are using smart contracts, and to a degree machine learning, to then apply rules within the reconciliation between the bank statement and our data.

“That enables them to enhance the cash details with referencing information obtained from messaging. They can break a lump sum of cash into multiple parts relevant to each transaction that has been agreed and settled within that larger settlement.”

The banking system uses a common format “soft statement” on the Swift network to send and receive end-of-day account statements.

Mr Card said: “Because standard data formats are used, this enables us — with Fennech — to apply a set of rules on how we identify the financial movement.

“So, if a million dollars comes in, we can break that down to hundreds of parts if that’s what the client requires, and also enhance it with transactional information so they can then apply it to their ledger systems.”

In this way, a company can automatically match received cash against transactions, replacing what has hitherto been a manually based process because there was no previous fit between bank and the company’s accounting systems.

EnabledCash is one of a number of software applications in the stable of London-based WCL. Other applications include EnabledPlacing and Enabled MGA.

Another is EnabledAccounting. Mr Card said a recent enhancement to is the ability to have two-way query conversations using data, rather than though e-mails.

“The strength of a two-way message-based query process is you have an auditable record of what you are doing to bring about the correct financial outcome,” Mr Card said.

WCL was founded in 2003 and is a wholly-owned subsidiary of Advisen. It has a long association with the insurance market in Bermuda.

Mr Card said: “When I speak with clients and prospects, I tell them they can enter this digital world, in a relatively straightforward and cost-effective way to begin with, and then look at the opportunities to build this out into process automation, which is the second wave.

“We are having advanced conversations with a number of companies on the island. We are able to refer them to existing users.

“Often a prospect wants to get a better idea of how it works in practice.”

There was a share-and-learn user-group gathering on the island last month, where companies could speak to one another about their experiences using the new technologies.

• WCL has a website at https://webconnectivityltd.com/