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A number of insurers have been testing blockchain technology, including its application for multinational insurance programmes.
AIG’s development of blockchain technology in the multinational insurance space is fairly well advanced. This year, it piloted a blockchain multinational P&C insurance programme with Standard Chartered Bank, which included coverages in the US, UK, Singapore and Kenya.
Emily Jenner, head of insurable operational risk at Standard Chartered Bank in London, who led the blockchain initiative, believes the technology can help overcome current shortcomings with multinational insurance programmes and greatly speed up their placement.
“With blockchain, potentially a multinational programme could be issued within 24 hours. You can see who has been paid and when. There is no hiding and it removes the need to keep chasing. There is a single source of truth, with access based on customised views and permissions,” said Ms Jenner.
She added that multinational insurance programmes have been weighed down by cumbersome processes and inefficient administration. “Many insurance buyers are frustrated with the workings of multinational programmes, so much so that the true value of risk transfer is often lost,” she said.
According to Ms Jenner, blockchain can create a new level of transparency and trust between risk managers and insurance providers, reducing the opportunities for errors and frictional costs within multinational programmes. It can also give much greater visibility, centrally and at the local level, as well as delivering a more efficient way of working with third parties like brokers and loss adjusters.
At present, group risk managers struggle to see all pieces of a multinational insurance transaction, whether premiums have been paid and if policies have been issued.
Renewals for cash before cover countries can take months of preparation, and even then there can be an issue with contract certainty, explained Ms Jenner. “You need to chase local offices to check that the premium has been paid and the policy issued,” she said.
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