AIG & IBM pilot blockchain smart contract
Written by Anthony Strzalek
AIG, IBM and Standard Chartered Bank have announced a successful joint pilot of the first multinational ‘smart contract’-based insurance policy using blockchain.
The distributed ledger technology (DLT) solution creates a new level of trust and transparency in the underwriting process, enabling AIG and Standard Chartered to execute multinational coverage more efficiently. Coordinating management and placement of multiple insurance policies across multiple countries is highly complex. The pilot solution was built by IBM and is based on Hyperledger Fabric – a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation.
Working together, 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.
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 pilot also demonstrates the ability to include third parties in the network, such as brokers, auditors and other stakeholders, giving them a customised view of policy and payment data and documentation.
Rob Schimek, CEO of commercial at AIG, said: “Our pilot proves blockchain has a powerful role to play in the future of insurance. Any technology, including blockchain, that can increase trust and transparency for an industry whose pillars are built on that, should be fully explored. We’re excited to be delivering innovation that matters to our clients – and co-developing key components of this new technology together.”
Emily Jenner, head of insurable operational risk at Standard Chartered, added: “As a global bank we have to ensure consistent, trustworthy and secure financial transactions, be that as part of our business or as customers ourselves. 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.”