Marsh explores blockchain applications with proof of insurance
Marsh’s new proof of insurance blockchain pilot, created in partnership with IBM, ACORD and ISN, is just the beginning of the global insurance broker’s plans for the ledger technology, its chief digital and analytics officer says.
The platform, rolled out on April 16, offers immediate commercial proof of coverage to employers for contracted workers—and was built on IBM’s blockchain operating system with strategic input from industry association ACORD. ISN, a collector of more than 67,000 contract employee records, is the first of Marsh’s clients to test the product in market.
“Before any contractor can start work, it’s a business’ obligation to make sure they are insured,” said Sastry Durvasula, chief digital and data analytics officer at Marsh. “Proof of insurance on the blockchain offers automation, more security and efficiency in onboarding them quickly.”
Marsh Digital Labs, Marsh’s incubator launched earlier this month in San Francisco, is looking at a number of use cases related to blockchain in insurance, Durvasual says. Some use cases deal with basic proof of insurance, while others address initial risk assessment and the transfer of that risk from clients to insurance companies.
Last month, the firm also became the first broker to join the Enterprise Ethereum Alliance, which aims to connect startups, incumbents and academics across several industries for the purposes of advanced blockchain adoption. The news followed much activity on the part of carriers around the technology prior. A total of 33 companies, including the likes of AIG, Aon, Chubb and Gen Re all joined the Blockchain Insurance Industry Initiative (B3i) group in 2017, with the same mandate. Nationwide, Humana and United Healthcare have each also launched blockchain pilots since mid-December. Like Marsh's, Nationwide's blockchain application is around proof of insurance.
“There are lots of paper or manual steps [in insurance] that can change thanks to blockchain,” Durvasula notes. “It comes down to collaboration across companies, which is easier through a decentralized system.”
Some of the aforementioned manual steps lie in claims settlement and insurance underwriting, he added. As these processes get more digital and automated, blockchain can connect different platforms and establish a shared, immutable record of all the transactions that take place in real-time. Durvasula envisions a future where all insurance players—carriers, reinsurers, brokers, agents, regulators and startups—are all connected through blockchain.
“Other financial services are a few blocks ahead of us, but we will see more partnerships, from both traditional and non-traditional backgrounds, take place that will create a network of networks and a broader ecosystem in insurance,” he concluded.