缅北轮奸

American International Group Inc. and Standard Chartered Bank plc announced they have successfully piloted what they say is the first multinational, “smart contract” based insurance policy using blockchain, a distributed ledger technology.

Noting that coordinating management and placement of multiple insurance policies across multiple countries is highly complex, AIG and Standard Chartered said use of the blockchain has enabled them to execute and manage multinational coverage more efficiently and has created a new level of transparency in the underwriting process. The pilot solution was built by IBM and is based on Hyperledger Fabric 鈥� a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation.

The three parties chose to execute this initiative in one of the most complicated areas of commercial insurance 鈥� multinational risk transfer 鈥� to better understand blockchain’s potential to reduce friction and increase trust.

Working together, AIG, Standard Chartered and IBM converted a multinational, controlled master policy written in the UK, and three local policies in the U.S., Singapore and Kenya, into a “smart contract” that provides a shared view of policy data and documentation in real-time. This also allows visibility into coverage and premium payment at the local and master level as well as automated notifications to network participants following payment events.

The companies said the pilot also demonstrates the ability to include third parties in the network, such as brokers, auditors and other stakeholders, giving them a customized view of policy and payment data and documentation.

“Our pilot proves blockchain has a powerful role to play in the future of insurance,” said Rob Schimek, CEO of Commercial for AIG. “Any technology, including blockchain, that can increase trust and transparency for an industry whose pillars are built on that, should be fully explored.”

Emily Jenner, head of Insurable Operational Risk at Standard Chartered, said that as a global bank, Standard Chartered seeks to ensure “consistent, trustworthy and secure” financial transactions. “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,” Jenner said.

IBM has been working to apply blockchain in the insurance industry, where it has said it sees tremendous potential. “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,” Marie Wieck, general manager, IBM Blockchain said.

The multinational “master policy” is written out of London and for the pilot, three local policies were chosen that cover the U.S., Kenya and Singapore. These three jurisdictions were chosen because the U.S. is a large and complex market, Singapore is a growth market for Standard Chartered, and Kenya has a specific regulatory requirement, known as “cash before cover” which means that cover must be paid for before it is valid.

“We chose these three territories because of their importance to Standard Chartered and also because of their regulatory complexity, so that we could fully test how blockchain technology might make these contracts work more efficiently,” said Standard Chartered’s Jenner.

How blockchain works:

• Blockchain, an immutable, security rich and transparent shared digital ledger provides a single view of truth across all participants while simultaneously providing selective visibility to participants based on their credentials.
• It provides the ability to record and track events and associated payments in each country related to the insurance policy.
• No one party can modify, delete or even append any record without the consensus from others on the network.
• This level of transparency promises to help reduce fraud and errors, as well as the need for the parties to contact each other to view policy and payment data and the status of policies.

Editor’s Note: Carrier Management/缅北轮奸’s L.S. Howard has written about blockchain product development in her report, Brave New World: 1st Reinsurance Product Heads to the Blockchain, and on the promise of blockchain in insurance in What Is Blockchain and How Does It Work?

Topics Legislation AIG