PwC has announced the creation of a working blockchain prototype which aims to reduce costs for London insurance market claims.

The project, designed for the London Market Target Operating Model (TOM) Innovation Exchange, demonstrates that exploiting blockchain technology can reduce costs and speed up the payment process in the insurance market.

The proof of concept was developed by PwC’s blockchain team in Belfast, which comprises 25 blockchain engineers.

Completed over a six-week period, the proof of concept focuses on enhancing interactions between multiple different London Market parties involved in a claims process (third party administrators, claims approvers and brokers).

The automated process includes claim creation, supporting documents, invoice creation and approval or rejection of invoices and demonstrates how blockchain can make interaction between multiple parties in the claims process more efficient.

As part of the trial, various parties were given different roles and permissions to view data. Smart contracts were used to automatically approve claims which met pre-agreed conditions. This results in reduced administrative costs and burdens, coupled with faster claims approval and payment. With rules in place that all parties have agreed, certain claims approvals can occur automatically.

Steve Webb, financial services blockchain leader at PwC, said: “This proof of concept demonstrates the potential for efficiency and the elimination of error and duplicated information. It shows how blockchain can reduce costs and speed up the claims process in the London Market, allowing experts to focus on more value-add complex claims.”

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