Ryan Solomon: Today I'm joined by Pat Schmied, president of the Institute's Riskstream Collaborative, the insurance industry's largest not-for-profit blockchain consortium. Riskstream just became a strategic partner of the Hedera Council, building on their work tokenizing property risk data on both Hedera and HashFhere. Super excited today to get into what that council see changes and what it takes to bring production grade blockchain infrastructure into one of the world's most regulated industries. Pat. Welcome. I would love if you kick us off here and tell us what risk stream is and the scale of the market it operates in.
Patrick Schmid: Thank you for having me. what is Risk Dream? We are the industry's, in a sense, largest nonprofit emerging technology consortium. So we're operating within the property casualty insurance industry. And we're part of kind of a broader nonprofit or group of nonprofits called the Institutes. The Institutes was founded a hundred years ago out of the Wharton School. And they were originally founded just to provide. Property casualty education. Today they educate over 100,000 insurance professionals annually. but they also have 20 other affiliate nonprofits part of their group, all reporting up to a board of about 40, 50, generally CEOs that represent a sizable majority of domestic insurance premium volume. So you really have this network of insurance professionals through the institutes. In terms of risk stream itself, that board. Created Riskstream directly around 2017-2018. And the interest at that time from the board of these various CEOs was blockchain technology and trying to understand if blockchain technology could help with multi-party business process issues that the industry was facing. So we have a governance construct associated with Rist Stream. We have over 30 carrier broker reinsurer members that are part of our group that. work with us to set kind of our governance structure, various requirements through working groups and advisory committees. And our goal is to build these multi-party solutions that really no single company would be able to do on their own. You know, issues like related to multi-party claims or fraud are great examples of multi-party issues the industry faces that would be very difficult for, you know, a single carrier to solve on their own. In terms of the the the the vastness of the insurance industry, you know, the US property casualty insurance, where we're focused, wrote over $1.1 trillion in direct written premium in 2025. so you can imagine that across carriers, brokers, and various reinsurers, there are a variety of these multi-party problems that we could help solve through the Risk Stream Collaborative and partnerships like this one with Hedera.
Ryan Solomon: So I think what's interesting and you kind of lead us into the d you know, maybe the data problem across multiple different participants. how long has this kind of existed? Obviously there's a reason that you guys are are are doing this collaboratively c collaboratively as well. Maybe walk us through in broader scope, kind of the the data problem that does exist right now.
Patrick Schmid: Sure. so you know, from a gap standpoint, property data, you can think of it as risk data. It today, it believe it or not, it really does move from these organizations via spreadsheet and email. so a commercial property, for example, it may not have a universal ID associated with it. It really doesn't have something like an address that is consistent across different parties to make sure that these different parties are all even speaking about the same underlying property. So there's kind of this redundancy that's associated with, you know, risk assessment in the insurance industry. You know, you have, in a sense, the with with commercial properties, when they are seeking insurance, you have the the party that the would-be policy holder. So they're seeking insurance for their property. Then there's the broker who is trying to in a sense assess the risk and find a carrier, the insurance carrier is involved. There could be data providers or should be data providers involved trying to provide data on that risk, but they're not all necessarily talking about the same underlying property. And the underlying data associated with it is called COPE data, which stands for construction, occupancy, protection, and exposure data. And this data varies in those spreadsheets. They're going through different parties. There it's it's a it's a really challenging situation for these parties to sort through that. so why has no one fixed this issue? There's no really no single company that has had the in a sense the incentive or neutrality to be able to bring the competitors together to solve this problem. but now is a particularly important time to start thinking about this because the risks in general are are changing. I mean, an example is wildfire. But other examples could be flood or severe convective storms. The cost of this fragmentation of data that we talked about and the lack of like a tokenized identifier is creating more and more challenges for the industry. And we spoke a little bit about commercial properties, but for residential properties, that's a pretty big issue. Wildfire is a great example where you can clean up the brush around your own property. And that would lower the risk for your residential property somewhat. but the it's almost a community thing, too. Like if your neighbor and your neighbor's neighbor aren't doing the same type of activity to lower their risk, that community profile also could create an issue. So that same token that we're going to talk a little bit about here today gives it both a residential, a permissioned environment where new data like wildfire mitigation can kind of be brought in and it could be aggregated up to a community level so you can start to understand is this community taking the right mitigation risks as well.
Ryan Solomon: data for risk, I would imagine. is not static. risk is changing in real time every second of every single day. So I guess the question maybe a lead-in for that would be is the goal to kind of get risk management down to the almost instantaneous point
Patrick Schmid: That's the longer term goal for sure. Like the the challenge is there's there's risks associated with the underlying asset that, to your point, are changing with the kind of peril risk that's out there. And the data associated with those risks is also changing in kind of an environment where we now have Io IoT. AI, you can imagine there's more proliferation of data, but if we don't have the right rails to attach that data to the underlying risk, it's going to be very difficult. It's kind of like all noise, right? And we want to get down to really the basics of what we're try we're after. We need the right rails in order to do that. we need some of the rails to be interoperable and public and some of the rails to be a little bit more proprietary and private so that it can be exchanged on permissioned basis. So We're doing all the above with the Hadar team.
Ryan Solomon: Yeah, and you mentioned Hedera. I know that there was an announcement, I think this was back in June for new strategic and community partners. And through the initiatives that you guys are involved with, you joined the Hedera Council as a strategic partner. What happens there? What what does that type of integration kind of open up with a seat there? And why do you feel like they're maybe walk us through kind of that hybrid model that you're talking about and why it's so important.
Patrick Schmid: Sure. So really the the partner status, it it it allows us as an industry to like focus really on the governance angles and allows the technology provider to really focus in on the tech itself, the tech rails. So what we're really doing through our relationship here is you know, we're thinking about those data angles, you know, what data crosses the public versus private layers, who's going to get access, what are the standards? They're really being decided by our, you know, working groups, our advisory committees through the Risk Stream Collaborative. but you know, knowing the rails too is going to be important to the regulatory communities. Obviously, insurance is a regulated industry. the member companies are also going to want to know, you know, how the underlying tech works. And I think we have like this track record where the industry infrastructure projects that are built by, you know, large scale tech vendors or whatnot without. Clarity on those types of things aren't generally, you know, moving forward. But I think what our partner status provides us with is the ability to explain the governance angles that we are really focusing in on, and then really showcasing the Hedera methodology of the technology behind it to any interested party during a security review or some sort of assessment. In terms of like the property risk. portal, as we're calling it today, it may change in terms of naming conventions down the road. the ha Hedera Hash fear model, I think you could kind of like think of it sort of like a a VIN for a building, but it's public and it's interoperable. So really we're using tokenization in a slightly different manner than I think most folks talk about it today, where they're talking about investments and that sort of thing for stocks and so on. We're really looking at it for a data concept. So the idea with this is you have sort of a public layer where every property would get, in a sense, a persistent token that would be anchored on Hedera. Really, like think of it like this: you know, there's a property out in Iowa. So you know the longitude and latitude of that particular property and some other public attributes that you're not concerned would be publicly available. But if you do look into that particular property, you're going to get this same In a sense, token ID. From there on the private chain, there's a private layer. The sensitive data, the risk data, the cope data that we talked about earlier, that construction, occupancy, protection, exposure data, that would live more on the hash fear side, where it's a permissioned ledger where, you know, like the broker and the carrier, maybe, maybe someday a reinsurer, certainly data provider, can all exchange information related to that very same risk. In more of a streamlined way. So you're no longer talking Excel sheets and emails where there's a lot of redundancy. You're talking about kind of a single single version of the truth. So the data providers are participants, or is actually another angle here that should be mentioned. That per permissioned layer isn't too limited to just carriers and brokers. Data providers, like maybe new emerging data providers like wildfire modelers or mitigation verifiers, could be in that part too. So that's where we're starting to add new layers of data. And that kind of hybrid, not one or the other, approach to both public and private provides this interoperability angle to this, which I think, you know, a fully private ledger is not going to give that universal identifier across various entities. That fully public layer can provide that, where then you get the sensitive data that's being exchanged in more of the private permissioned variant. Does that make sense? So that's how we're working with Hedera
Ryan Solomon: Yeah, and I think it makes
Patrick Schmid: and Hashbeer.
Ryan Solomon: and I think that makes sense. I mean, that's where that's the way that the the world works right now. I think that, you know, historically in blockchain and distributed ledger, it was like, hey, here's this really cool technology that everything's gonna going to eventually move on top of. But it's a little bit more, I guess, granular than that, where there's there just has to be privacy, whether it be from a clo compliance standpoint or a competitive advantage standpoint, or probably a multitude of reasons, but then there's all this really interesting thing there's all these really interesting things that can be anchored from a public kind of network standpoint as well. You mentioned transparency and you know anchoring some of the aspects for for different properties there. So I think it totally makes sense. It's it's super exciting, especially in an industry like you guys are working in. As this kind of takes shape, I mean, because I know that I would imagine we're still pretty early in this game, how do you envision this the real changes in and value ads kind of represent themselves for insurers or brokers or policyholders once this kind of and I'm sure this is a very staged type of a a thing, but I would love your take on it.
Patrick Schmid: Yeah, absolutely. for carriers, I think for insurance carriers, the the underwriting of the the risk theoretically gets faster, right? Because you're now going to have access in a more streamlined manner to the underlying data, which allows you to look at the verified property record in a more streamlined manner. I think the brokers will benefit because kind of the submission angle of getting the information from the would-be policy holder will be a little bit simpler. You'll have one, in a sense, permiss per persistent property record that's following this asset instead of kind of having to do it from scratch every single time you're getting it. and then the reinsurers, this one's pretty interesting too, because, you know, the the reinsurers are kind of in a sense looking at overall risk. From the insurance industry and then looking at, you know, sometimes packaging that risk. So treaty pricing today, for example, runs on stale aggregated data. So this verified token could change that. It's an actually an interesting parallel, just quick aside. You know, back during the financial crisis, we had the mortgage-backed securities. And investors were kind of you know, not clear about what was packaged within those mortgage-backed securities in terms of the risks. And, you know, the, the, the reinsurance community faces some level, at not maybe not to that extent, of a similar challenge of understanding, you know, the the risk associated with a treaty that's kind of packaged up. So they face, I would call like a milder version of the same problem, but tokenization could really help them too, because you'd be able to start to understand what, you know, What specifically the risk of those that package is if you go down to the token level. So a lot of improvement in efficiency overall, both for carriers, brokers, and reinsurers. I think the data providers still benefit here by setting up some new markets. So that identifier would follow the property. And I think this is the crux of what we see as like the larger vision. Really, what we're talking about in this discussion is the risk associated with an asset that's not insured.
Ryan Solomon: Mm.
Patrick Schmid: So there's risks associated with that asset, and we're creating this public identifiable, you know, identifier for that asset that can follow that asset. And eventually there'll be a policy that would, in a sense, I think, be like a more of a child token to that asset token. And you can verify against it. So, like one of the things that's true troubling an insurance industry from an efficiency standpoint is verifying insurance. Do you have insurance coverage? That's A fairly painful process. If you're you know buying a car, you have to verify your insurance and so on. That process could be now that you have this child token, you would be able to verify in a more publicly available way, theoretically, down the road. And you can imagine from there you have a claim token. So it's all linked to the underlying asset. So this vision, if you think about it in that regard, asset policy token. Is persistent across all areas of insurance. We're just getting started with property here, but the the ability to have less friction, more automated clarity on verifying policy coverage, you know, more transparency related to claims has huge potential to impact the insurance industry over time.
Ryan Solomon: I just bought a vehicle and the car I've got a new license plate and the car dealership. I don't think put in that my that I the insurance directly carried over into the new vehicle. So the the state kind of Pendot sent me a a letter that was like Hey, you need to verify that you're still insurance. And I'm like, so I'm gonna have to call the car dealership again because all of this stuff is still so manual. And you mentioned kind of the the value add for insurers, brokers, policyholders. I would imagine that becomes a flywheel effect to the extent that eventually there's downstream effects even to consumers and purchasers of real estate where the fees get lower and all the other stuff that really cares, which obviously sparks a lot of interesting things from the the economic standpoint for the ways that we participate in real estate and things like that right now.
Patrick Schmid: Absolutely. I mean, you know, my background is as an economist and some of our other affiliates at the institutes are really analyzing industry issues as they call them. And one of the industry issues today that the industry's, you know, kind of being brought up quite a bit because they're a regulated industry, is is this affordability problem. Now affordability, of course, is somewhat subjective depending on where you are and so on and so forth, but we're trying to understand why certain state A Seemingly is a bit more affordable than State B. And there are a variety of different factors that are going to weigh into that. But the concept of making things more efficient is certainly, I think, advantageous for that affordability problem over t over over time. It it it it makes sense that if you can make the process more efficient, those costs that are spent on the inefficiencies can be reduced, and therefore, you know, more affordable insurance can transmit from that. So That is absolutely the hope here. That's exactly what we're aiming to to try to accomplish for the industry. I think it's in the industry's best interest to become more efficient and to pass those savings on to consumers. I think they're they're interested in doing that too. So we'll see if we can get to that point. We'll one of the things that would be really neat to measure is over time if this does go live and we have it start to be onboarded by significant parties. I think that you could start to measure the impact from an affordability standpoint too.
Ryan Solomon: Sure. I would love if you kind of walk us out here. So where you you probably answered some of this, but where does risk stream go from here as kind of adoption scales? what you feel like this might signal, I guess more importantly, and I think certainly relevant to the seat on the council and things like that, what you guys showing what you're facilitating through risk stream and the institutes. what what what that signals maybe for other highly regulated industries that are dealing with risk and things like that.
Patrick Schmid: Yeah, absolutely. So for us, where we are now, we've we've kind of developed the proof of concept. we're moving towards more of a pilot phase with carriers and brokers involved. We're looking to get some data providers involved too. I think that'll take some time. But what's next? I think we're looking to expand beyond the property use case once that identifier and governance model is is kind of proven out here in in in in what we're doing currently. And we know that there's the ability to connect some of these downstream use cases. we're doing some other work in auto insurance, for example, where you know we're allowing the c the the so more on the claim token I was discussing earlier and insurety bonds, we're looking at the bond itself and tokenizing the bond. So the ability to do this across different frameworks is is is huge. And I think like the bigger signal here is that any regulated, fragmented industry, you know, there's a variety of them out there. We've been talking to the to to the energy insurance and or the energy industry, I should say. But you know, financial services, healthcare, there that's that problem we were discussing of multiple players, in a sense needing the same underlying verified facts about something is probably relevant. And therefore, we think that this likely is going to impact, if it's not already, other industries. So a neutral governance structure by, you know, like kind of what we're doing with Ristream, plus the public-private hybrid tech and kind of infrastructure seems to be a pretty interesting blueprint for how these other industries could create more efficiencies. And, you know, we talked a little bit about the affordability problem overall, but I mean that that might help with a more affordable goods and services in general. So we're excited about where this could go. And we'll be happy to, you know, maybe have a follow-up on this and give you some more data once we're once we're live and moving forward with the the app that we're currently looking into.
Ryan Solomon: Yeah, definitely. Make sure that you guys come back because I'm always interested in doing follow-ups. I want to make sure that for those that are interested in learning more about the work that the Institute's Risk Stream Collaborative is facilitating, go to riskstream.org. you can also go to Hashcraft.com and learn more about the collaborative as well as the Hedera Strategic Council partners. Give Genfinity a follow at Genfinity and go to Genfinity.io. This interview will certainly be on there. Myself at Iov underscore OWL. And then give Patrick a follow at Patrick G underscore Schmied. S-C-H-M-I-D. Patrick, it's been awesome having you today. We certainly appreciate it. Looking forward to seeing all of the innovation coming out of the great great work that you guys are doing. And thank you so much.
Patrick Schmid: Thanks for having me. Appreciate it.
Patrick Schmid: Thank you for having me. what is Risk Dream? We are the industry's, in a sense, largest nonprofit emerging technology consortium. So we're operating within the property casualty insurance industry. And we're part of kind of a broader nonprofit or group of nonprofits called the Institutes. The Institutes was founded a hundred years ago out of the Wharton School. And they were originally founded just to provide. Property casualty education. Today they educate over 100,000 insurance professionals annually. but they also have 20 other affiliate nonprofits part of their group, all reporting up to a board of about 40, 50, generally CEOs that represent a sizable majority of domestic insurance premium volume. So you really have this network of insurance professionals through the institutes. In terms of risk stream itself, that board. Created Riskstream directly around 2017-2018. And the interest at that time from the board of these various CEOs was blockchain technology and trying to understand if blockchain technology could help with multi-party business process issues that the industry was facing. So we have a governance construct associated with Rist Stream. We have over 30 carrier broker reinsurer members that are part of our group that. work with us to set kind of our governance structure, various requirements through working groups and advisory committees. And our goal is to build these multi-party solutions that really no single company would be able to do on their own. You know, issues like related to multi-party claims or fraud are great examples of multi-party issues the industry faces that would be very difficult for, you know, a single carrier to solve on their own. In terms of the the the the vastness of the insurance industry, you know, the US property casualty insurance, where we're focused, wrote over $1.1 trillion in direct written premium in 2025. so you can imagine that across carriers, brokers, and various reinsurers, there are a variety of these multi-party problems that we could help solve through the Risk Stream Collaborative and partnerships like this one with Hedera.
Ryan Solomon: So I think what's interesting and you kind of lead us into the d you know, maybe the data problem across multiple different participants. how long has this kind of existed? Obviously there's a reason that you guys are are are doing this collaboratively c collaboratively as well. Maybe walk us through in broader scope, kind of the the data problem that does exist right now.
Patrick Schmid: Sure. so you know, from a gap standpoint, property data, you can think of it as risk data. It today, it believe it or not, it really does move from these organizations via spreadsheet and email. so a commercial property, for example, it may not have a universal ID associated with it. It really doesn't have something like an address that is consistent across different parties to make sure that these different parties are all even speaking about the same underlying property. So there's kind of this redundancy that's associated with, you know, risk assessment in the insurance industry. You know, you have, in a sense, the with with commercial properties, when they are seeking insurance, you have the the party that the would-be policy holder. So they're seeking insurance for their property. Then there's the broker who is trying to in a sense assess the risk and find a carrier, the insurance carrier is involved. There could be data providers or should be data providers involved trying to provide data on that risk, but they're not all necessarily talking about the same underlying property. And the underlying data associated with it is called COPE data, which stands for construction, occupancy, protection, and exposure data. And this data varies in those spreadsheets. They're going through different parties. There it's it's a it's a really challenging situation for these parties to sort through that. so why has no one fixed this issue? There's no really no single company that has had the in a sense the incentive or neutrality to be able to bring the competitors together to solve this problem. but now is a particularly important time to start thinking about this because the risks in general are are changing. I mean, an example is wildfire. But other examples could be flood or severe convective storms. The cost of this fragmentation of data that we talked about and the lack of like a tokenized identifier is creating more and more challenges for the industry. And we spoke a little bit about commercial properties, but for residential properties, that's a pretty big issue. Wildfire is a great example where you can clean up the brush around your own property. And that would lower the risk for your residential property somewhat. but the it's almost a community thing, too. Like if your neighbor and your neighbor's neighbor aren't doing the same type of activity to lower their risk, that community profile also could create an issue. So that same token that we're going to talk a little bit about here today gives it both a residential, a permissioned environment where new data like wildfire mitigation can kind of be brought in and it could be aggregated up to a community level so you can start to understand is this community taking the right mitigation risks as well.
Ryan Solomon: data for risk, I would imagine. is not static. risk is changing in real time every second of every single day. So I guess the question maybe a lead-in for that would be is the goal to kind of get risk management down to the almost instantaneous point
Patrick Schmid: That's the longer term goal for sure. Like the the challenge is there's there's risks associated with the underlying asset that, to your point, are changing with the kind of peril risk that's out there. And the data associated with those risks is also changing in kind of an environment where we now have Io IoT. AI, you can imagine there's more proliferation of data, but if we don't have the right rails to attach that data to the underlying risk, it's going to be very difficult. It's kind of like all noise, right? And we want to get down to really the basics of what we're try we're after. We need the right rails in order to do that. we need some of the rails to be interoperable and public and some of the rails to be a little bit more proprietary and private so that it can be exchanged on permissioned basis. So We're doing all the above with the Hadar team.
Ryan Solomon: Yeah, and you mentioned Hedera. I know that there was an announcement, I think this was back in June for new strategic and community partners. And through the initiatives that you guys are involved with, you joined the Hedera Council as a strategic partner. What happens there? What what does that type of integration kind of open up with a seat there? And why do you feel like they're maybe walk us through kind of that hybrid model that you're talking about and why it's so important.
Patrick Schmid: Sure. So really the the partner status, it it it allows us as an industry to like focus really on the governance angles and allows the technology provider to really focus in on the tech itself, the tech rails. So what we're really doing through our relationship here is you know, we're thinking about those data angles, you know, what data crosses the public versus private layers, who's going to get access, what are the standards? They're really being decided by our, you know, working groups, our advisory committees through the Risk Stream Collaborative. but you know, knowing the rails too is going to be important to the regulatory communities. Obviously, insurance is a regulated industry. the member companies are also going to want to know, you know, how the underlying tech works. And I think we have like this track record where the industry infrastructure projects that are built by, you know, large scale tech vendors or whatnot without. Clarity on those types of things aren't generally, you know, moving forward. But I think what our partner status provides us with is the ability to explain the governance angles that we are really focusing in on, and then really showcasing the Hedera methodology of the technology behind it to any interested party during a security review or some sort of assessment. In terms of like the property risk. portal, as we're calling it today, it may change in terms of naming conventions down the road. the ha Hedera Hash fear model, I think you could kind of like think of it sort of like a a VIN for a building, but it's public and it's interoperable. So really we're using tokenization in a slightly different manner than I think most folks talk about it today, where they're talking about investments and that sort of thing for stocks and so on. We're really looking at it for a data concept. So the idea with this is you have sort of a public layer where every property would get, in a sense, a persistent token that would be anchored on Hedera. Really, like think of it like this: you know, there's a property out in Iowa. So you know the longitude and latitude of that particular property and some other public attributes that you're not concerned would be publicly available. But if you do look into that particular property, you're going to get this same In a sense, token ID. From there on the private chain, there's a private layer. The sensitive data, the risk data, the cope data that we talked about earlier, that construction, occupancy, protection, exposure data, that would live more on the hash fear side, where it's a permissioned ledger where, you know, like the broker and the carrier, maybe, maybe someday a reinsurer, certainly data provider, can all exchange information related to that very same risk. In more of a streamlined way. So you're no longer talking Excel sheets and emails where there's a lot of redundancy. You're talking about kind of a single single version of the truth. So the data providers are participants, or is actually another angle here that should be mentioned. That per permissioned layer isn't too limited to just carriers and brokers. Data providers, like maybe new emerging data providers like wildfire modelers or mitigation verifiers, could be in that part too. So that's where we're starting to add new layers of data. And that kind of hybrid, not one or the other, approach to both public and private provides this interoperability angle to this, which I think, you know, a fully private ledger is not going to give that universal identifier across various entities. That fully public layer can provide that, where then you get the sensitive data that's being exchanged in more of the private permissioned variant. Does that make sense? So that's how we're working with Hedera
Ryan Solomon: Yeah, and I think it makes
Patrick Schmid: and Hashbeer.
Ryan Solomon: and I think that makes sense. I mean, that's where that's the way that the the world works right now. I think that, you know, historically in blockchain and distributed ledger, it was like, hey, here's this really cool technology that everything's gonna going to eventually move on top of. But it's a little bit more, I guess, granular than that, where there's there just has to be privacy, whether it be from a clo compliance standpoint or a competitive advantage standpoint, or probably a multitude of reasons, but then there's all this really interesting thing there's all these really interesting things that can be anchored from a public kind of network standpoint as well. You mentioned transparency and you know anchoring some of the aspects for for different properties there. So I think it totally makes sense. It's it's super exciting, especially in an industry like you guys are working in. As this kind of takes shape, I mean, because I know that I would imagine we're still pretty early in this game, how do you envision this the real changes in and value ads kind of represent themselves for insurers or brokers or policyholders once this kind of and I'm sure this is a very staged type of a a thing, but I would love your take on it.
Patrick Schmid: Yeah, absolutely. for carriers, I think for insurance carriers, the the underwriting of the the risk theoretically gets faster, right? Because you're now going to have access in a more streamlined manner to the underlying data, which allows you to look at the verified property record in a more streamlined manner. I think the brokers will benefit because kind of the submission angle of getting the information from the would-be policy holder will be a little bit simpler. You'll have one, in a sense, permiss per persistent property record that's following this asset instead of kind of having to do it from scratch every single time you're getting it. and then the reinsurers, this one's pretty interesting too, because, you know, the the reinsurers are kind of in a sense looking at overall risk. From the insurance industry and then looking at, you know, sometimes packaging that risk. So treaty pricing today, for example, runs on stale aggregated data. So this verified token could change that. It's an actually an interesting parallel, just quick aside. You know, back during the financial crisis, we had the mortgage-backed securities. And investors were kind of you know, not clear about what was packaged within those mortgage-backed securities in terms of the risks. And, you know, the, the, the reinsurance community faces some level, at not maybe not to that extent, of a similar challenge of understanding, you know, the the risk associated with a treaty that's kind of packaged up. So they face, I would call like a milder version of the same problem, but tokenization could really help them too, because you'd be able to start to understand what, you know, What specifically the risk of those that package is if you go down to the token level. So a lot of improvement in efficiency overall, both for carriers, brokers, and reinsurers. I think the data providers still benefit here by setting up some new markets. So that identifier would follow the property. And I think this is the crux of what we see as like the larger vision. Really, what we're talking about in this discussion is the risk associated with an asset that's not insured.
Ryan Solomon: Mm.
Patrick Schmid: So there's risks associated with that asset, and we're creating this public identifiable, you know, identifier for that asset that can follow that asset. And eventually there'll be a policy that would, in a sense, I think, be like a more of a child token to that asset token. And you can verify against it. So, like one of the things that's true troubling an insurance industry from an efficiency standpoint is verifying insurance. Do you have insurance coverage? That's A fairly painful process. If you're you know buying a car, you have to verify your insurance and so on. That process could be now that you have this child token, you would be able to verify in a more publicly available way, theoretically, down the road. And you can imagine from there you have a claim token. So it's all linked to the underlying asset. So this vision, if you think about it in that regard, asset policy token. Is persistent across all areas of insurance. We're just getting started with property here, but the the ability to have less friction, more automated clarity on verifying policy coverage, you know, more transparency related to claims has huge potential to impact the insurance industry over time.
Ryan Solomon: I just bought a vehicle and the car I've got a new license plate and the car dealership. I don't think put in that my that I the insurance directly carried over into the new vehicle. So the the state kind of Pendot sent me a a letter that was like Hey, you need to verify that you're still insurance. And I'm like, so I'm gonna have to call the car dealership again because all of this stuff is still so manual. And you mentioned kind of the the value add for insurers, brokers, policyholders. I would imagine that becomes a flywheel effect to the extent that eventually there's downstream effects even to consumers and purchasers of real estate where the fees get lower and all the other stuff that really cares, which obviously sparks a lot of interesting things from the the economic standpoint for the ways that we participate in real estate and things like that right now.
Patrick Schmid: Absolutely. I mean, you know, my background is as an economist and some of our other affiliates at the institutes are really analyzing industry issues as they call them. And one of the industry issues today that the industry's, you know, kind of being brought up quite a bit because they're a regulated industry, is is this affordability problem. Now affordability, of course, is somewhat subjective depending on where you are and so on and so forth, but we're trying to understand why certain state A Seemingly is a bit more affordable than State B. And there are a variety of different factors that are going to weigh into that. But the concept of making things more efficient is certainly, I think, advantageous for that affordability problem over t over over time. It it it it makes sense that if you can make the process more efficient, those costs that are spent on the inefficiencies can be reduced, and therefore, you know, more affordable insurance can transmit from that. So That is absolutely the hope here. That's exactly what we're aiming to to try to accomplish for the industry. I think it's in the industry's best interest to become more efficient and to pass those savings on to consumers. I think they're they're interested in doing that too. So we'll see if we can get to that point. We'll one of the things that would be really neat to measure is over time if this does go live and we have it start to be onboarded by significant parties. I think that you could start to measure the impact from an affordability standpoint too.
Ryan Solomon: Sure. I would love if you kind of walk us out here. So where you you probably answered some of this, but where does risk stream go from here as kind of adoption scales? what you feel like this might signal, I guess more importantly, and I think certainly relevant to the seat on the council and things like that, what you guys showing what you're facilitating through risk stream and the institutes. what what what that signals maybe for other highly regulated industries that are dealing with risk and things like that.
Patrick Schmid: Yeah, absolutely. So for us, where we are now, we've we've kind of developed the proof of concept. we're moving towards more of a pilot phase with carriers and brokers involved. We're looking to get some data providers involved too. I think that'll take some time. But what's next? I think we're looking to expand beyond the property use case once that identifier and governance model is is kind of proven out here in in in in what we're doing currently. And we know that there's the ability to connect some of these downstream use cases. we're doing some other work in auto insurance, for example, where you know we're allowing the c the the so more on the claim token I was discussing earlier and insurety bonds, we're looking at the bond itself and tokenizing the bond. So the ability to do this across different frameworks is is is huge. And I think like the bigger signal here is that any regulated, fragmented industry, you know, there's a variety of them out there. We've been talking to the to to the energy insurance and or the energy industry, I should say. But you know, financial services, healthcare, there that's that problem we were discussing of multiple players, in a sense needing the same underlying verified facts about something is probably relevant. And therefore, we think that this likely is going to impact, if it's not already, other industries. So a neutral governance structure by, you know, like kind of what we're doing with Ristream, plus the public-private hybrid tech and kind of infrastructure seems to be a pretty interesting blueprint for how these other industries could create more efficiencies. And, you know, we talked a little bit about the affordability problem overall, but I mean that that might help with a more affordable goods and services in general. So we're excited about where this could go. And we'll be happy to, you know, maybe have a follow-up on this and give you some more data once we're once we're live and moving forward with the the app that we're currently looking into.
Ryan Solomon: Yeah, definitely. Make sure that you guys come back because I'm always interested in doing follow-ups. I want to make sure that for those that are interested in learning more about the work that the Institute's Risk Stream Collaborative is facilitating, go to riskstream.org. you can also go to Hashcraft.com and learn more about the collaborative as well as the Hedera Strategic Council partners. Give Genfinity a follow at Genfinity and go to Genfinity.io. This interview will certainly be on there. Myself at Iov underscore OWL. And then give Patrick a follow at Patrick G underscore Schmied. S-C-H-M-I-D. Patrick, it's been awesome having you today. We certainly appreciate it. Looking forward to seeing all of the innovation coming out of the great great work that you guys are doing. And thank you so much.
Patrick Schmid: Thanks for having me. Appreciate it.
