AIG and Standard Chartered have successfully piloted the first multinational, smart contract based insurance policy.
Created in tandem with IBM, the policy, based on Hyperledger Fabric, looks to leverage blockchain to bring increased transparency to the underwriting process.
The management of insurance policies that span across multiple legal jurisdictions and countries is a highly complex process.
The pilot converted an existing multinational policy into a smart contract that provided a shared view of policy data and documentation in real time. This allows for ‘visibility into coverage and premium payment at the local and master level as well as automated notifications to network participants following payment events’.
The use of smart contracts also allowed third parties, such as brokers and auditors, to be included into the network and have a customised view of payment and policy data and documentation.
‘Increase trust and transparency’
Rob Schimek, CEO of Commercial, AIG said:
“Our pilot proves blockchain has a powerful role to play in the future of insurance. Any technology, including blockchain, that can increase trust and transparency for an industry whose pillars are built on that, should be fully explored.
“We’re excited to be delivering innovation that matters to our clients – and co-developing key components of this new technology together.”
Standard Chartered’s Head of Insurable Operational Risk, Emily Jenner, said:
“As a global bank we have to ensure consistent, trustworthy and secure financial transactions, be that as part of our business or as customers ourselves.” Standard chartered’s Head of Insurable Operational Risk, Emily Jenner, said.
“By creating a process by which we can arrange multinational insurance contracts through blockchain we not only have transaction security but contract certainty across multiple business locations.”
Marie Wieck, general manager of IBM Blockchain, said:
“There is tremendous opportunity to apply advancements in blockchain technology to transform the insurance industry.”
“By creatively leveraging smart contracts to help address tough regulatory requirements across different markets, we are seeing the enormous impact blockchain can have to improve efficiency and open up new business models.”