CORE is grounded in information and intelligence. That is, we start with the collection of objective cloud performance data, work up to the analytics layer, and finally enable insurance and financial institutions to input their end-customer parameters. The output is a custom-built hedging instrument designed to mitigate the customer's business financial exposure to cloud service disruptions.
Insurance and financial institutions hook into our prediction engine to input customer parameters such as cloud architecture attributes and financial risk tolerances.
The final result is a bespoke over-the-counter financial derivative that insurance and financial institutions can sell to businesses running on the cloud.
Custom Hedging Instrument
We collect both historical and live cloud performance data across a vast number of services from various cloud service providers.
Data Ingestion Engine
Proprietary algorithms crunch the collected data and evolve over time in response to newly gathered data.
Cloud Outage Risk Engine
A better cloud ecosystem is a shared responsibility. So we're sharing our know-how and technology.
The insurance industry is a notoriously slow-moving behemoth. They're the first to admit it. So we're giving them a bit of rocket fuel to launch new products that protect businesses running on public cloud computing resources.
CORE collects vast amounts of historical and live cloud performance data across a number of service providers. Algorithms form the backbone that drives predictive risk analytics, which are used by insurance and financial institutions to structure relevant hedging products for businesses that run on the cloud.
Cloud service providers sell various cloud computing resources to help businesses operate.
Businesses that run operations on public cloud resources are vulnerable to financial risks deriving from cloud service disruptions.
CORE ingests historical and live health data on various public cloud services. Algorithms process the information to make predictions.
Insurance companies and financial institutions use CORE analytics to power actuarial and financial models that create hedging instruments for businesses running on cloud computing.
CORE is an analytics engine used by insurance and financial institutions.
Great changes require teamwork. For businesses to benefit from using the cloud without fear of financial risks from cloud service outages, every player in the value chain needs to be in place.
Black Swan Technology's CORE helps Ping An make breakthroughs in structuring cloud computing derivatives.
Case Study: Ping An Insurance
Ping An, China's largest insurance conglomerate, has been aggressively expanding its product innovation to cover the failure of new technologies. In 2015, it had the foresight to offer a primitive form of cloud outage insurance, which was folded into its existing business cyber insurance plans.
However, the product failed to gain traction with businesses that run on the cloud. According to Ping An, it lacked the capability to properly assess underlying cloud outage risks and thus calculate appropriate premiums. Without insight into the performance health of their business customer's various cloud services, Ping An designed terms and conditions of payout that were detached from technical and reality.
In early 2017, Ping An discovered that Black Swan Technology had started creating and structuring original derivative instruments to protect businesses against the financial risks of cloud service outages (COPA). At the heart of Black Swan Technology's core capability is the CORE, a data ingestion and predictive analytics engine designed to assess cloud outage risk.
Ping An and Black Swan Technology drew up plans to enable Ping An's internal product innovation team to hook into the CORE. Equipped with CORE intelligence, Ping An has announced the rollout of several new standalone cloud technology derivative products for business customers by late 2018.
Why would Black Swan Technology share its expertise with insurance and financial institutions? Isn't that giving away the "secrete sauce?"
Indeed, Black Swan Technology (BST) uses its CORE to structure cloud technology derivatives of its own (COPA). Therefore, at first blush, it appears as if by sharing CORE with other insurance and finance institutions, it is enabling competitors. But this couldn't be farther from the truth.
First, COPAs are over-the-counter contracts obligating BST to issue payouts to the business in the event that the latter is disrupted by cloud service outages. This means that BST holds the payout risk on its balance sheet. While this is viable in moderate amounts, it is not actually BST's core business. Rather, BST specializes in building usable intelligence about cloud computing risks. It is not a finance house, but a technology house. Seen in this light, it makes sense that BST would share CORE with insurance and finance institutions who have vast amount of reserves and diversification strategies to hold the payout risks and earn premiums in return.
Second, insurance and financial institutions are not competitors. They are, technically speaking, consumers of BST's CORE, which makes them intermediate customers. In the entire value chain, BST is upstream to insurance and finance institutions.
The classic concept of comparative advantage applies here. BST is an expert in cloud data intelligence and analytics. By contrast, insurance and finance institutions excel at selling hedging instruments and resolving their own internal solvency risks through reserves, diversification, and re-insurance.
Black Swan Technology
Insurance & Financial Institutions
Businesses Running on Cloud Computing
Cloud Technology Derivatives