Blockchain Tracker: AIG And IBM’s Smart Insurance Contract

In blockchain news, the technology may be on the verge of falling like dominos into widespread commercial use.

While many outlets have reported on the difficulties of applying blockchain across industries, implementation issues are mostly due to regulations. Comprised of a technology that can be edited by anyone, at any time, it may be a while before blockchain fully “goes mainstream.”

In a sense, blockchain can be viewed as the Wikipedia of the technology arena.

Having a target that is always moving can prove tough to pin down. While Microsoft and Bank of America Merrill Lynch set the scene by developing and testing blockchain as a trade finance solution in September 2016, the technology has received mixed reviews on its use. The CEO of Russia‘s largest bank, Herman Gref of Sberbank, believes commercial application will occur in his country within two-and-a-half years. In contrast, Canada‘s central bank has voted against playing a role in its interbank system, citing “too many hurdles” to jump over.

What will it take to push blockchain into mainstream use? Perhaps the answer lies within the education sector. The University of Edinburgh just announced its plans to become the first European university to offer a course in the technology to help train computer engineers. It is likely that mass adoption will be the key to the continued success of blockchain.

One project helping to move the blockchain ball is the American International Group, Inc. (AIG) and International Business Machines Corp (IBM) partnership to develop a “smart” insurance policy for Standard Chartered Bank PLC. In this new offering, Standard Chartered will be utilizing the Hyperledger Fabric blockchain technology platform hosted by the Linux Foundation to help manage complex international insurance contracts.

This blockchain-based smart contract will allow the bank to exchange real-time information for policies developed in the U.K. and coordinate with offices in the United States, Singapore and Kenya.

“There is tremendous opportunity to apply advancements in blockchain technology to transform the insurance industry,” said Marie Wieck, general manager of IBM Blockchain. “By creatively leveraging smart contracts to help address tough regulatory requirements across different markets, we are seeing the enormous impact blockchain can have to improve efficiency and open up new business models.”

With this new smart contract policy in place, Standard Chartered Bank is looking to streamline its operations and reduce costs.

While AIG is the first insurer to partner with a technology company, it is not the only one looking to test the somewhat controversial blockchain. Munich Re, Swiss Re, Zurich, Generali, Zurich and Allianz are all considering making moves into blockchain technology experimentation.

In addition to the AIG/IBM insurance industry news, blockchain technology is proving to have many other applications.

There have been discussions about applying blockchain technology to the grocery industry to ensure fresh foods stay fresh. Grocers may use blockchain to better maintain sustainable agriculture, supply chain transparency and safety monitoring.

Comcast shared news this week that it will allow marketers to use blockchain technology to purchase ads for both broadcast and streaming television. Through Comcast’s Blockchain Insights Platform, marketers can match their data with network programmers to better target consumers without revealing or sharing personal information.

Accenture and Microsoft have also announced their partnership on a digital ID networking solution utilizing blockchain technology. While this new offering is designed to benefit refugees who may not always have access to their official documents, there is a possibility this digital ID platform could become more widely used somewhere down the line.

As it stands now, blockchain technology is slowly making its way into numerous conversations and applications. With AIG, IBM, Comcast, Accenture and Microsoft already on board, it may be safe to say that the first blockchain domino has fallen.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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