Insurance sector blockchain effort impresses
Blockchain technology has been trialled in the insurance sector, linking participants on four continents; and the experience has been described as “pretty positive”.
The project was highlighted at KPMG’s Fintech Bermuda Summit as an example of the potential use of the technology in the financial and insurance sectors.
Pooja Barodekar, global head of multinational operations at American International Group, was on the panel of a blockchain-focused session at the one-day conference.
The project she described involved AIG, IBM, a global bank, brokers and other partners. She explained how it evolved to meet a goal of linking a broker, client and insurer with an initial aim of standardising processes. Ms Barodekar said AIG looked at and evaluated technologies that would work to enable that outcome.
“That’s when blockchain was brought to our attention,” she said. “Our objective was to deliver a multinational programme using blockchain technology. We wanted to create transparency and make sure it was secure.”
The project focused on four countries, namely the UK, Kenya, US and Singapore.
“We wanted to test every element of multinational implantation,” she said. This included meeting the regulatory requirements of each jurisdiction.
“We felt confident it was helping us to reduce friction, to reduce the administrative burden around how these programmes get executed and, most importantly, it was offering transparency.”
The circular system connected the global bank — which was the client — with AIG and other stakeholders and partners, such as brokers, involved in the transaction. Smart contract interactions took place between those involved.
The audience at the Elbow Beach Hotel was told that in the blockchain-enabled ecosystem a policy would be created, a payment would be recorded and that would then be acknowledged as received.
“With every execution there are lots of queries and questions asked, so we wanted to ensure all those were enabled through this ecosystem. That helped us communicate easily,” said Ms Barodekar.
“We also wanted to make sure that whoever was supposed to see the information was seeing the information, and that the information was not available to everyone.”
Explaining this, she said: “So as a global risk manager, or a global broker or global insurer, you could see the entire programme — all country details at a higher level. But if you’re in a local entity, say in Kenya, Singapore, or US, you would only see your own piece. That’s the beauty of it. You can create your own provisioning rules based off the role you are playing in it.”
In conclusion, Ms Barodekar said: “It was a pretty positive experience; roles were identified and our client was excited.”
Also on the panel was Eamonn Maguire, managing director, advisory for KPMG in the US. He is the company’s US lead for blockchain focused on capital markets and regulatory requirements. He spoke about operational savings in the banking sector that can be expected through the sharing of information using blockchain within a trusted network. An example is the reduction or elimination of the need for repeated, duplicated inputting of information.
He said: “What’s the economic benefit of KYC [Know Your Customer] with respect to the improvements that blockchain can potentially bring?
“Based upon the ability to share or re-share that is inbound, either for individuals or corporate entities the expected benefit is in the vicinity of about 25 per cent with the costs associated with KYC information collection and subsequent analysis.”
Another speaker was Bart Cant, partner, financial services and blockchain at IBM. He gave an example of how blockchain-enabled smart contracts can be used to enable automatic execution of flight insurance payments once the delayed flight has been verified on the blockchain.
John Narraway, a start-up entrepreneur and consultant for emerging technologies with the Bermuda Business Development Agency, later joined the panel for a question-and-answer session. He spoke about Bermuda’s stance regarding blockchain. Mr Narraway leads the business development working group that is part of the Bermuda Government’s Blockchain Task Force.
OBA suspends two members over ‘altercation’
Family appeal for help for Kandice
Smith-Williams guilty of gun killing
Casino gaming regulations are finally public
Steede attack seen by Nottingham couple
New director at BTA
Magnum gym’s 24-hour access proves popular
Take Our Poll