The three companies created a master policy written in the UK that includes three local insurance policies in the U.S., Singapore and Kenya, and made it a "smart contract" that provides a shared view of policy data and documentation in real-time.
The solution is structured so that multiple parties in the network -- including brokers, regulators and auditors -- can collaborate more effectively and efficiently, according to IBM. The blockchain gives all of the parties a unified view of policy and payment data and documentation so that they can make informed business decisions based on a common set of trusted data.
"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," Rob Schimek, CEO of AIG's Commercial division, said in a statement. "We're excited to be delivering innovation that matters to our clients and co-developing key components of this new technology together."
Other businesses have used blockchain in supply chains for its provenance-enabled tracking abilities, which can keep tabs on specific goods as they move from shippers to outlets.
For example, IBM and Maersk, the world's largest container shipping operator, recently announced they are piloting Hyperledger Fabric to help manage and track the paper trail of tens of millions of shipping containers across the world by digitizing the supply chain process from end-to-end. The goal: to enhance transparency and the highly secure sharing of information among trading partners.
A new blockchain solution from IBM and Maersk can manage and track the paper trail of tens of millions of shipping containers across the world by digitizing the supply chain process.
When adopted at scale, the blockchain has the potential to save the industry billions of dollars, the two companies said.
As a peer-to-peer network, combined with a distributed time-stamping server, blockchain databases can be managed autonomously. There's no need for an administrator because the users are the administrator.
When used for smart contracts, blockchain first captures all terms and conditions between an organization and its customers, then uses data gleaned across distributed nodes or servers to determine when those conditions have been met and payment is authorized.
Blockchain eliminates huge amounts of recordkeeping, which can get confusing when there are multiple parties involved in a transaction, according to Saurabh Gupta, vice president of strategy at IT services company Genpact. "Blockchain and distributed ledgers may eventually be the method for integrating the entire commercial world's record keeping," he said.
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