NEW YORK--(BUSINESS WIRE)--Jun. 15, 2017--
American International Group Inc. (NYSE: AIG), IBM (NYSE:
IBM) and Standard Chartered Bank plc announced they have
successfully piloted the first multinational, “smart contract” based
insurance policy using blockchain, a distributed ledger technology.
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The blockchain solution creates a new level of trust and transparency in
the underwriting process, enabling AIG and Standard Chartered to execute
multinational coverage more efficiently. Coordinating management and
placement of multiple insurance policies across multiple countries is
highly complex. The pilot solution was built by IBM and is based on
Hyperledger Fabric – a blockchain framework and one of the Hyperledger
projects hosted by The Linux Foundation.
Working together, AIG, Standard Chartered and IBM converted a
multinational, controlled master policy written in the UK, and three
local policies in the US, Singapore and Kenya, into a “smart contract”
that provides a shared view of policy data and documentation in
real-time. This also allows visibility into coverage and premium payment
at the local and master level as well as automated notifications to
network participants following payment events. The pilot also
demonstrates the ability to include third parties in the network, such
as brokers, auditors and other stakeholders, giving them a customized
view of policy and payment data and documentation.
Rob Schimek, CEO of Commercial, AIG said: “Our pilot proves blockchain
has a powerful role to play in the future of insurance. Any technology,
including blockchain, that can increase trust and transparency for an
industry whose pillars are built on that, should be fully explored.
We’re excited to be delivering innovation that matters to our clients –
and co-developing key components of this new technology together.”
The three parties chose to execute this initiative in one of the most
complicated areas of Commercial Insurance – multinational risk transfer
– to better understand blockchain’s potential to reduce friction and
increase trust in other areas of the insurance value chain.
How it works:
-
Blockchain, an immutable, security rich and 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.
-
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.
Emily Jenner, Head of Insurable Operational Risk at Standard Chartered,
said: “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. By creating a process by which we can arrange
multinational insurance contracts through blockchain we not only have
transaction security but contract certainty across multiple business
locations.”
Marie Wieck, General Manager, IBM Blockchain said: “There is tremendous
opportunity to apply advancements in blockchain technology to transform
the insurance industry. 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.”
The multinational “master policy” is written out of London and for the
pilot, three local policies were chosen that cover the US, Kenya and
Singapore. These three jurisdictions were chosen because the US is a
large and complex market, Singapore is a growth market for Standard
Chartered, and Kenya has a specific regulatory requirement, known as
“cash before cover” which means that cover must be paid for before it is
valid.
“We chose these three territories because of their importance to
Standard Chartered and also because of their regulatory complexity, so
that we could fully test how blockchain technology might make these
contracts work more efficiently,” said Standard Chartered’s Jenner.
Notes to Editors
AIG
American International Group, Inc. (AIG) is a leading global insurance
organization. Founded in 1919, today AIG member companies provide a wide
range of property casualty insurance, life insurance, retirement
products, and other financial services to customers in more than 80
countries and jurisdictions. These diverse offerings include products
and services that help businesses and individuals protect their assets,
manage risks and provide for retirement security. AIG’s core businesses
include Commercial Insurance and Consumer Insurance, as well as Other
Operations. Commercial Insurance comprises two modules – Liability and
Financial Lines, and Property and Special Risks. Consumer Insurance
comprises four modules – Individual Retirement, Group Retirement, Life
Insurance and Personal Insurance. AIG common stock is listed on the New
York Stock Exchange and the Tokyo Stock Exchange.
Additional information about AIG can be found at www.aig.com
and www.aig.com/strategyupdate
| YouTube: www.youtube.com/aig
| Twitter: @AIGinsurance www.twitter.com/AIGinsurance
| LinkedIn: www.linkedin.com/company/aig.
These references with additional information about AIG have been
provided as a convenience, and the information contained on such
websites is not incorporated by reference into this press release.
AIG is the marketing name for the worldwide property-casualty, life and
retirement, and general insurance operations of American International
Group, Inc. For additional information, please visit our website at www.aig.com.
All products and services are written or provided by subsidiaries or
affiliates of American International Group, Inc. Products or services
may not be available in all countries, and coverage is subject to actual
policy language. Non-insurance products and services may be provided by
independent third parties. Certain property-casualty coverages may be
provided by a surplus lines insurer. Surplus lines insurers do not
generally participate in state guaranty funds, and insureds are
therefore not protected by such funds.
IBM
IBM is the leader in open-source blockchain solutions built for the
enterprise. As an early member of Hyperledger, an open source
collaborative effort created to advance cross-industry blockchain
technologies, IBM is dedicated to supporting the development of
openly-governed blockchains. IBM has worked with more than 400 clients
across financial services, supply chains, IoT, risk management, digital
rights management and healthcare to implement blockchain applications.
For more information about IBM Blockchain, visit www.ibm.com/blockchain.
Standard Chartered
We are a leading international banking group, with more than 80,000
employees and a 150-year history in some of the world’s most dynamic
markets. We bank the people and companies driving investment, trade and
the creation of wealth across Asia, Africa and the Middle East. Our
heritage and values are expressed in our brand promise, Here for good.
Standard Chartered PLC is listed on the London and Hong Kong Stock
Exchanges as well as the Bombay and National Stock Exchanges in India.
For more information please visit www.sc.com.
Explore our insights and comment on our blog, BeyondBorders. Follow
Standard Chartered on Twitter, LinkedIn and Facebook.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170615005586/en/
Source: American International Group Inc.
AIG:
AIG Europe Ltd.
Nicola Ratchford, +44 20 3217 1789
Head
of Communications
or
AIG Commercial
Matt Gallagher,
+1-212-458-3247
Head of Communications
or
Standard
Chartered:
Bart Nash, +44 207 885 7598
Head of Corporate
Affairs, Europe
or
IBM:
Holli Haswell,
+1-720-396-5485
Director External Communications, Industry Platforms
or
Hannah
Slocum, +1-978-877-0105
External Communications