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Allianz Introduces Blockchain Prototype For Captive Insurance Programs

At the beginning of the month, Allianz Global Corporate & Specialty S.E. (AGCS), a global insurer and financial services firm, revealed that it had been developing a prototype to utilize blockchain technology with a global captive insurance agency. This prototype was designed in order to improve the ways in which nations can make international insurance and financial transactions.

Allianz began experimenting with blockchain technology in late 2015, when it was announced that they had brought blockchain startup Everledger in to work with their accelerator startup program to develop proofs-of-concept. The company continued with their exploration of blockchain technology in June of 2016, when the Alliance Risk Transfer (ART) portion of their business utilized blockchain technology in the transaction of a natural catastrophe swap. In addition, Allianz SE is part of the B3i blockchain insurance industry initiative, which has also been developing (and recently released) a blockchain prototype for reinsurance purposes.

ART has joined forces with Ernst & Young Ltd. as well as the digital agency Ginetta and Citi Treasury and Trade Solutions on this project. Citi Treasury and Trade Solutions has provided the payment processing services for the prototype.

Here are some of the details on the prototype’s development and what it does:

  • The prototype uses blockchain technology in order to connect the parties involved with the captive insurance program, and shares a distributed ledger of record transactions and data entries as well as any changes across all users in real time.
  • It was built on the Hyperledger Fabric 1.0 blockchain framework, published by Linux in July.
  • According to Allianz S.E.’s statement, the prototype focuses on professional indemnity and property insurance for a captive insurance program with local subsidiaries in China, the U.S., and Switzerland, and examines the three most common process flows in captive insurance: annual policy renewals, premium payments, and claims submission and settlement.
  • The prototype aimed to demonstrate that international insurance transactions can be significantly streamlined, accelerated, and simplified, and the results thus far have shown that blockchain technology can greatly improve the efficiency of international corporate insurance transactions.
  • Functionalities include cash payments, real-time access to tracked information, and a convenient, intuitive, and easy-to-use user interface.
  • The prototype analyzes policy renewals, premium payments, and claims submission and settlement process flows and then translates them into the distributed ledger environment, which will reduce the time spent going from start to policy, policy to premium, and claim to settlement.

AGCS Board Member Hartmut Mai said in a statement, “We are currently seeing many blockchain applications in the financial services industry, and we are eager to explore the potential of this exciting technology in the corporate insurance segment.”

Caitlin Morgan Captive Services provides clients with captive insurance solutions supported by years of experience in establishing the successful formation and implementation of a wide range of captives. To learn more about how we can help you, please contact us at (317) 575-4440.

Sources: Coindesk, Captive Insurance Times, Business Insurance, Reinsurance, Insurance Journal