A reinsurance initiative using blockchain technology will undergo “beta testing” next month before a planned wider introduction to the market.

Beta testing involves testing the product with a number of user companies prior to a full commercial launch.

The B3i group of 15 insurers and reinsurers says it has produced a prototype to enable handling of property catastrophe excess-of-loss “smart” contracts using the distributed ledger technology.

“The deployment architecture is already close to a production-ready environment and the team is preparing for feature enhancements of the prototype and a first deployment into production [next year],” B3i’s Paul Meeusen told participants at this month’s Monte Carlo Reinsurance Rendezvous.

B3i members and new participants will have access to a “sandbox” environment to simulate the creation and settlement of contracts during the beta testing, and will provide feedback.

“To collectively explore how blockchain can help us be more efficient and better deliver for our clients is in the whole industry’s interest,” XL Catlin Property and Casualty Insurance and Reinsurance President Greg Hendrick said. “This is an exciting step for the B3i and a significant leap towards the future for the industry.”

B3i was established last year to explore the potential of distributed ledger technology for insurance. The technology offers a shared process for handling information between parties that can provide transparency and security, while speeding processes and reducing costs.

The team has also developed an industry business case for the platform across the whole value chain, with companies suggesting a productivity gain of up to 30% is achievable.

B3i’s 15 members are Achmea, Aegon, Ageas, Allianz, Generali, Hannover Re, Liberty Mutual, Munich Re, Reinsurance Group of America, Scor, Sompo Japan Nipponkoa Insurance, Swiss Re, Tokio Marine Holdings, XL Catlin and Zurich.