IBM has powered a blockchain technology pilot project for American International Group (AIG), IBM and Standard Chartered Bank.
This is the first multi-national smart contract based insurance policy using blockchain technology.
The blockchain solution creates a new level of transparency in the underwriting process, enabling AIG and Standard Chartered to execute multinational coverage efficiently.
IBM built the pilot solution on Hyperledger Fabric – a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation.
AIG, Standard Chartered and IBM converted a multinational, controlled master policy written in the UK, and three local policies in the US, Singapore and Kenya, into a “smart contract” that provides a shared view of policy data and documentation in real-time.
The blockchain technology pilot 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.
The three parties chose to execute this initiative to better understand blockchain’s potential to reduce friction and increase trust in other areas of the insurance value chain.
“There is opportunity to apply advancements in blockchain technology to transform the insurance industry. By leveraging smart contracts to help address regulatory requirements across different markets, we are seeing the enormous impact blockchain can have to improve efficiency and open up new business models,” said Marie Wieck, general manager, IBM Blockchain.
The multinational “master policy” is written out of London and for the pilot, three local policies were chosen that cover the US, Kenya and Singapore. These three jurisdictions were chosen because the US is a large and complex market, Singapore is a growth market for Standard Chartered, and Kenya has a specific regulatory requirement.
