American International Group (AIG) has sold UK-based Standard Chartered Bank the world’s first blockchain-based multinational insurance policy in hopes that it will cut costs and reduce regulatory complexity.
AIG Uses Blockchain Ledger for Insurance
Another first for blockchain technology, AIG has just added insurance to blockchain’s growing list of applications. AIG, a multinational insurance provider, recently announced it had sold its first blockchain-based insurance policy to the UK’s Standard Chartered Bank.
By using a blockchain ledger to record insurance data, AIG will be able to track policy and payment data in real-time, thereby reducing some of the monumental complexity involved in multinational insurance coverage. Their hope is that this increased efficiency will lead to far fewer delays and cut costs for all parties involved.
A Maze of Paperwork & International Regulations
The goal of AIG’s new policy is to reduce the complexity that often comes with managing international insurance claims. Because of byzantine regulation systems (and the mountains of paperwork that come with them), multinational insurance coverage is often cumbersome and risky.
Carol Barton, President of AIG Multinational, says that blockchain will help cut the company cut down on months of processing time:
There’s a lot of back and forth and it’s all through email chains going around the world, instead of a centralized system… typically a multinational policy can take a lot of time because of local regulatory requirements. This system provides a lot of certainty more quickly.
The new policy integrates a multinational “master policy” based in the UK with “local policies” from the US, Kenya, and Singapore. Although Standard Chartered chose not to involve its brokers in the agreement, AIG states that the new policy does allow for third parties such as brokers, auditors, and other stakeholders to be involved.
‘A Single View of Truth’
By design, a blockchain ledger cannot be manipulated or otherwise covertly modified without the consensus from other nodes