The insurer and tech giant will use blockchain for managing complex forms of international coverage.
American International Group (AIG) and International Business Machines (IBM) are partnering to create a form of smart contract insurance policy. This coverage will employ blockchain for the management of highly complex forms of international insurance protection.
The two companies recently completed the smart contract coverage policy pilot project.
The smart contract insurance multi-national policy pilot provided Standard Chartered Bank PLC with coverage. The pilot used blockchain’s digital leader technology for what IBM and AIG called a first of its kind accomplishment. The policy used blockchain in order to make it easier to share real-time information among four different countries. The data was shared regarding the U.K. written bank headquarters policy with three other local insurance policies in the United States, Kenya and Singapore.
This smart contract insurance could help justify the millions invested into blockchain by banks and other financial institutions.
The goal of the blockchain investments was to improve the speed, ease and security of transactions.
Blockchain tech is already in use as it is behind the Bitcoin digital currency, making it possible for the necessary data to be shared throughout a network composed of many individual computers. Its usefulness is becoming increasingly recognized and popular on a global scale in tasks such as in transaction or asset tracking and recording across a spectrum of industries.
This is not IBM’s only effort into blockchain. The company has been entering into partnerships with other companies in a range of different industries. This includes Maersk, the Danish transportation company. They worked together on forming blockchain-based products that would make it possible to enhance the efficiency and accuracy of complex international interactions across multiple sectors.
The nature of blockchain makes it well suited to multinational smart contract insurance coverage. The reason is due to the deep complexity of the labyrinth of payment terms, paperwork and even regulations on a national and international level. “There’s a lot of back and forth and it’s all through email chains going around the world, instead of a centralized system,” explained AIG Multinational president, Carol Barton.