8 November 2017Analysis

Allianz implements blockchain prototype for captives

Allianz Global Corporate & Specialty (AGCS) has successfully implemented blockchain technology for the existing captive insurance programme of one of its clients.

AGCS's Allianz Risk Transfer (ART) line of business partnered with Ernst & Young (EY) and digital agency Ginetta to create this blockchain prototype solution for a long-stand ART customer.

Furthermore, ART also partnered with Citi Treasury and Trade Solutions, which provided the payment processing services related to Allianz’s blockchain prototype.

“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,” explains AGCS board member Hartmut Mai. “The captive blockchain prototype is one further example of our commitment to leverage new technologies and drive innovation in insurance.”

The prototype is built on the blockchain framework Hyperledger Fabric 1.0, and focuses on two types of insurance policies - professional indemnity and property - for a captive insurance programme with local subsidiaries in the US, China and Switzerland.

“Our captive insurance blockchain prototype demonstrates that regular transactions and cash transfer between fronting insurers and clients can be significantly accelerated and simplified,” says Yann Krattiger, Principal at ART. “Automated processing replaces the exchange of thousands of emails and massive data files. Each process is transparent and can be tracked in real-time. Our customers benefit from increased speed, reliability and auditability.”

The prototype looks at three common process flows in the captive insurance cycle – annual policy renewals, premium payments and claims submission and settlement. It translates these processes into the distributed ledger environment decreasing the time from start to policy, policy to premium and claim to settlement.

EY Project Manager Isabella Brom commented: “The captive insurance blockchain prototype is a prime example of EY’s approach on co-innovating with our clients. It allowed us to demonstrate and trial the power of distribution and decentralisation in the transformation of the insurance industry, using the Hyperledger Fabric Composer toolset to achieve fast and flexible prototype results. The project deepened our and our client’s understanding of how applied blockchain technology will not only fundamentally change insurance as we know it but also create new business models.”