The first multinational, «smart contract» based insurance policy using distributed ledger technology has been successfully piloted.
Standard Chartered Bank (SCB), American International Group (AIG), and IBM have converted a multinational, controlled master policy written in the United Kingdom, and three local policies in the U.S., Singapore and Kenya, into a «smart contract» that provides a shared view of policy data and documentation in real-time.
The pilot, built by IBM on Hyperledger Fabric, brings transparency and trust to a complex underwriting process that involves the management and placement of multiple insurance policies across different jurisdictions.
How it Works
The transparent shared digital ledger provides a single view of truth across all participants while simultaneously providing selective visibility to participants based on their credentials.
It provides the ability to record and track events and associated payments in each country related to the insurance policy. No one party can modify, delete or even append any record without the consensus from others on the network.
Trustworthy and Secure Transactions
This level of transparency helps reduce fraud and errors, as well as the need for the parties to contact each other to view policy and payment data and the status of policies. The project also demonstrated 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.
«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,» said Emily Jenner, head of insurable operational Risk at Standard Chartered.
