Thirteen Indian insurance companies have come together to use a blockchain-like technology in order to create a central repository of policy holder data. This will avoid them having to repeat the registration procedure for holders of multiple policies.
When speaking to Business Standard, Akshay Dhanak the Vice President of Business Systems & Technology at HDFC Life Insurance said: “When the same records are available to a number of life insurance companies in a chain, the cost incurred by them is lower compared to what it is when they were all separately conducting tests and storing records,”
A lot of work has to be done in know-your-customer, medical underwriting, financial underwriting, etc, when a customer buys insurance, he said. Duplication of these procedures can be prevented by having the entire data set on blockchain.
EY, a global advisory firm, will be facilitating the Indian consortium through tie ups with multiple technology partners. Sachin Seth, technology partner at EY said: “We are using multiple platforms like Hyper Ledger, MultiChain and Corda, among others. Each platform has its own benefits and limitations in terms of volume of transactions that they can handle and interoperability (that they offer),”
COO at IndiaFirst Life Insurance, Mr Mohit Rochlani, said that interoperability with other insurance companies — apart from banks, medical centres, among others — would be the eventual goal.
He indicated that any collaboration across industries constitutes data sharing as well as process sharing. There are regulatory concerns regarding data privacy that need to be addressed. Once the system develops, he said, it would help in decreasing cost and improving efficiency.
The savings in financial overheads due to the new technology are yet to be seen. But the consortium members are confident that greater transparency and reduced duplication would be beneficial for everyone involved.
KPMG has noted that one of the most disruptive applications of blockchain would be the development of “smart contracts”, which would streamline verification and authentication of details across all member parties simultaneously and would reduce costs.