AIG teams with IBM to use
blockchain for 'smart' insurance policy
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[June 15, 2017]
By Suzanne Barlyn
(Reuters) -
Insurer
American International Group Inc has partnered with International
Business Machines Corp to develop a "smart" insurance policy that uses
blockchain to manage complex international coverage, the companies said
on Wednesday.
AIG and IBM completed a pilot of a so-called "smart contract"
multi-national policy for Standard Chartered Bank PLC which the
companies said is the first of its kind using blockchain's digital
ledger technology.
The Standard Chartered policy uses blockchain to facilitate sharing of
real-time information for a main policy written in the United Kingdom,
where the bank is headquartered, and three local policies in the United
States, Singapore and Kenya.
Big banks, investors and other financial institutions have invested
millions of dollars in blockchain, hoping it could make transactions
faster, easier and more secure.
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IBM has been partnering with leading companies in various industries,
including Danish transport company Maersk, to create blockchain-based
products that can streamline complex international dealings across
sectors.
Blockchain technology, which powers the digital currency bitcoin,
enables data sharing across a network of individual computers. It has
gained worldwide popularity due to its usefulness in recording and
keeping track of assets or transactions across all industries.
Multinational insurance coverage is often cumbersome because of a maze
of international regulations, paperwork, and payment terms.
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![](../images/061517pics/busine28.jpg)
A man walks past the American International Group (AIG) building in
New York's financial district, March 16, 2009. REUTERS/Brendan
McDermid
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"There's a lot of back and forth and it's all through email chains going around
the world, instead of a centralized system," Carol Barton, President of AIG
Multinational said in an interview.
A master policy is typically issued in the country where a company is
headquartered, while affiliates often need coverage in other countries that
impose varying rules, documentation, and payment terms.
The real-time system allows companies, their units, and insurers, among others,
to simultaneously share all data and documents about the policies, the companies
said. It also notifies all of those involved about payments.
The territories selected for Standard Chartered's coverage each introduced a
level of complexity for testing the technology, IBM said. For example, a Kenya
regulation, known as "cash before cover," requires policyholders to pay for
their coverage before it is valid.
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