The “first” multinational, smart contract based insurance policy using blockchain

The “first” multinational, smart contract based insurance policy using blockchain

American International Group (AIG), IBM and Standard Chartered have piloted the “first” multinational, smart contract based insurance policy using blockchain.

The trio converted a 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. According to the firms. the pilot also demonstrates the ability to include third parties in the network, such as brokers, auditors and others, giving them a customised view of policy and payment data and documentation.

Rob Schimek, CEO of commercial, AIG, says: “Any technology, including blockchain, that can increase trust and transparency for an industry whose pillars are built on that, should be fully explored.”

The three parties say they chose to execute this initiative in one of the “most complicated” areas of commercial insurance – multinational risk transfer – to better understand blockchain’s potential in other areas of insurance.

The 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, known as “cash before cover” which means that cover must be paid for before it is valid.

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.