Participating in an insurance market event with a startup that aims to revive mutualism by providing a platform on Blockchain to make self-insuring a viable approach on a global scale was very cool but challenging. We are talking about the first Insurtech event in Brazil that happened on August 18, 2017, with the presence of insurers, reinsurers, brokers, regulators, corporate venture funds, and of course, entrepreneurs like us dreaming of changing the world.
The event was fantastic, especially for networking and the potential for partnerships. The opening speech with Guga Stocco already set the tone: Artificial Intelligence, IoT, Blockchain, and other technologies are here and here to stay, and the insurance market will not stay on the sidelines of this digital revolution. And so, starting with lectures and panels on incremental innovations, the event advanced in a growing tone until we reached the final with the most disruptive proposals involving Artificial Intelligence and ending with a panel of which we were part to talk about Blockchain.
In the first question addressed to me, coming from the panelist himself, emerges the question that seems to be a big question to all those who were there: what about regulation? This seems to be the biggest obstacle to innovation in most people's opinion. However, in Hugo Mentzingen 's own speech representing SUSEP (the main regulator of the sector in Brazil) in an earlier panel, it is clear that the regulator's objective is to provide security for the consumer and for the market as a whole, but that the institution understands that technological innovation has much to add, and that it is in favor of innovation. It is not clear what the path to conduct this innovation is, but we understand that it is not clear because there simply is not a paved path. After all, if it existed it would not be innovation. You cannot regulate something that does not exist. But it is possible to follow closely, to establish minimal guidelines to give the necessary security to the process of experimentation and validation of the technologies, and in that we bet, because we, at Mutual.Life, we not only understand the regulators' concerns, but also share them.
Our goal is to seize previously unthinkable possibilities, but now possible thanks to emerging technologies like Blockchain and AI. And just as the Internet has enabled new marketing, news, film, music, and other content models, these new technologies make it possible for new ways of guarding values, defining and performing obligations. Our mission is to generate value. We want to bring more security and economic stability to the millions of people around the world, especially in developing countries, such as Brazil, where the vast majority of the population is vulnerable to accidents and other forms of loss, mainly for two reasons: existing insurance products are financially infeasible or prohibitive, or because there are no adequate options for the specific needs of these people.
Obviously, it does not make sense for us to think of products that do not provide the necessary security for individual consumers, let alone for society as a whole. That is why we have made every effort to conduct our research and development in the most prudent and transparent way possible. In addition, we have sought references as to how the regulatory bodies in developed countries have operated with regard to the regulation of mutual groups, such as Solvency II of the European Parliament; for although we are not a mutual association, mutual aid groups will be formed on our platform and governed by our technology, which thanks to cryptocoins and smart contracts has the possibility to guarantee in its own protocol the equivalent of many of the compliance requirements.
For this and more, we see a great opportunity in the use of technologies like blockchain and smart contracts, which allow not only more transparent and auditable operations, but the automation of self-executing rules in its own management of the resources in the form of cryptocurrency. Of course, there are many challenges, especially as it is a new and still very superficially understood theme. Once again, we are available to help in this process of understanding, so that the effectively pertinent risks to this new form of arrangement are effectively understood and the next steps of the regulatory bodies are taken in a well-founded manner, always aiming for the common good and avoiding embarrassment and obstacles to the development of technologies such as Mutual.Life, which have the potential of having a major impact in popularizing a developing insurance culture across the developing world by combining mutualism with modern risk management and reinsurance.
We understand that this regulatory issue, while very important, is generally based on looking back on what past experience has taught us in order to mitigate such risks. Our contribution to development through innovation on the other hand is based on looking forward to what effective improvement modern technology offers all the parties involved. In this sense we hope that the debate will grow, and that the companies and other entities of the segment will be exposed to all this potential.
To illustrate, a chart from a June 2016 article summarizes the potential of Blockchain's use in the insurance market. Each item punctuated in the table below has a value-creation potential, and Mutual.Life is acting on just a few of them right now. Some offer incremental improvements, while others have more disruptive potential. In any case, it does not seem to us to be something that can be responsibly ignored or looked upon with skepticism or conservatism, for one way or another these innovations will come, and the safest way to absorb them is by engaging in this process of transformation.
In summary, we left Insurtech Brazil 2017 even more confident that we are on the right track. That the challenges are enormous, but the potential for value creation is infinitely greater, and that this is a worthwhile challenge. In the event's next editions, we will certainly have developments to share.