Technology giant IBM, in partnership with multinational insurer American International Group (AIG) and global bank Standard Chartered, announced that they successfully completed a pilot test of the first blockchain-based "smart contract" for a multinational insurance policy.
The results of this pilot were announced just this June 15, demonstrating that the blockchain application enables a new level of trust and transparency in the underwriting process, allowing AIG and Standard Chartered to offer multinational insurance more efficiently. The solution, which was built by IBM, is an smart contract based on the blockchain platform Hyperledger Fabric.
The initiative came about partly because the coordination, management and placement of multiple insurance policies in several countries becomes very complex due to both the distance and the different regulations to be fulfilled. But blockchain technology, by its characteristics, is rich in security and transparency, and the records are immutable and visible to all parties, so its application in this sector is a great advantage.
That is why AIG, Standard Chartered and IBM decided to test and execute this pilot in one of the more complicated areas of Commercial Insurance - such as the multinational risk transfer - in order to better understand the blockchain's potential to reduce friction and increase confidence in areas of the insurance value chain