November 7, 2017 by Staff
Allianz Global Corporate & Specialty (AGCS) successfully completed a trial of its blockchain solution for global captive insurance programs that is designed to speed up the sharing of information and the processing of payments.
The tool was tested on an actual client belonging to AGCS’ Allianz Risk Transfer (ART) line of business. The client has subsidiaries in the U.S., China and Switzerland.
The success was also dependent on the involvement of EY, which acted as the blockchain advisory service provider; Citi Treasury and Trade Solutions, which provided the payment processing services; and Ginetta, a digital agency that designed the user interface that allows for the real-time tracking by various stakeholders of the progress being made through the tool.
“We are currently seeing many blockchain applications in the financial services industry and are eager to explore the potential of this exciting technology in the corporate insurance segment,” explained Hartmut Mai, board member for the AGCS, through a statement. “The captive blockchain prototype is one further example of our commitment to leverage new technologies and drive innovation in insurance.”
Captive insurance programs involve numerous operating companies of a multinational organization with offices in multiple regions. These captives may cover more than 100 countries and hundreds of millions of dollars of insured assets, AGCS’ announcement notes.
Blockchain technology automatically connects all parties involved in the captive insurance program: the captive management, local subsidiaries and the fronting insurer. As a distributed ledger, blockchain records transactions and data entries. Any updates or changes to the data are shared in real-time across all users. The system is meant to produce a much faster, transparent, secure and efficient means of distributing information.
AGCS’ blockchain prototype was designed to focus on professional indemnity and property insurance and targeted the common process flows in the captive insurance cycle of annual policy renewals, premium payments and claims submission and settlement.
“Our captive insurance blockchain prototype demonstrates that regular transactions and cash transfer between fronting insurers and clients can be significantly accelerated and simplified,” says Yann Krattiger, principal at ART, in a statement. “Automated processing replaces the exchange of thousands of emails and massive data files. Each process is transparent and can be tracked in real time. Our customers benefit from increased speed, reliability and auditability.”
Payments were processed through Citi Treasury and Trade Solutions’ CitiConnect application program interface to accept payment instructions from the prototype program.
“The project deepened our and our client’s understanding of how applied blockchain technology will not only fundamentally change insurance as we know it but also create new business models,” said Isabella Brom, project manager at EY, in a statement
This story was originally published by Canadian Insurance Top Broker.