Recent months have seen commercial insurers and reinsurers testing a range of blockchain applications, which some believe could radically change the insurance market.
Blockchain technology offers a secure and efficient way for parties to share information and execute transactions. It sounds simple but if it lives up to its promise, blockchain could bring about a faster and more efficient insurance process, and pave the way for product innovation.
Most of the big-name multinational insurers have been investigating the technology. The past few months have seen Allianz test a captive insurance Blockchain platform, while AIG has been trialling a multinational insurance programme with Standard Chartered Bank.
Blockchain could be a real “game changer” for the corporate risk and insurance market, according to Emily Jenner, head of insurable operational risk at Standard Chartered Bank, London.
“Blockchain allows the risk manager to truly focus on the value insurance can bring – pure risk transfer. Which is sometimes lost through the inefficient processes and lack of real-time visibility,” said Ms Jenner, who has driven Standard Chartered Bank’s Blockchain initiative with AIG.
Ms Jenner believes that risk managers should collaborate with insurers on adopting the new technology and its application. “Risk managers need to work with their partners in the insurance industry to embrace the new technology so it is meaningful for buyers and insurers,” she said.
“There is a lot of talk of technology in the insurance industry, so it is exciting to be one of the organisations setting the standard. It shows that through collaboration we can make meaningful change,” said Ms Jenner.
“As an insurance buyer, we should not be afraid to ask insurance providers to do things in a meaningful and innovative way,” she added.
Standard Chartered Bank’s work with AIG has demonstrated that blockchain can increase contract certainty and efficiency. It can also reduce time and operational errors, while ultimately improving the business-to-business transaction experience for policyholders.
“This was an opportunity to showcase innovation and break with the traditional ways of doing things, instead of just enduring the pain of every renewal. Blockchain offers a technological solution to move into that space,” Ms Jenner told Commercial Risk Europe.
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