Storing data on blockchain will enable participating insurers to reduce operating costs, avoid duplication of procedures, and streamline approvals, Cognizant said.
A consortium of Indian life insurers and Cognizant Technology Solutions have developed a blockchain solution to facilitate cross-company data-sharing, with an aim to reduce the risk of data breaches, fraud and money laundering.
The consortium comprises SBI Life Insurance, Max Life Insurance, Canara HSBC OBC Life Insurance, Edelweiss Tokio Life, IDBI Federal Life Insurance, Birla Sun Life Insurance, HDFC Life, Kotak Life, Tata AIA Life, PNB MetLife, IndiaFirst Life Insurance, ICICI Prudential Life Insurance, Bharti AXA, Aegon Life, and SUD (Star Union Dai-ichi) Life Insurance.
The solution was developed late last year as part of a collaborative blockchain programme undertaken by the consortium and is expected to help these insurers reduce their reliance on data intermediaries and aggregators in obtaining customer and policy details for a wide range of critical purposes, such as know-your-customer due diligence, financial and medical underwriting, risk assessment, fraud detection, and regulatory compliance.
Storing data on blockchain will enable participating insurers to reduce operating costs, avoid duplication of procedures, and streamline approvals, Cognizant said in a statement on Monday.
“Blockchain has the potential to catalyze a significant shift in the insurance industry’s underlying technology and business models,” said Anand Pejawar, President — Operations, IT & International Business, SBI Life. “With its model of immutable and decentralized data, and its ability to prevent tampered documents and false billings from falling through the cracks, blockchain can enable insurance providers to introduce new models, reinvent processes, and increase capacity,” he added.
According to a definition by consultancy PwC: “Blockchain is, quite simply, a digital, decentralised ledger that keeps a record of all transactions that take place across a peer-to-peer network. The major innovation is that the technology allows market participants to transfer assets across the Internet without the need for a centralized third party.”
“As a shared source of truth, blockchain opens numerous possibilities for insurers to collaborate more effectively and transparently, make better informed decisions, and create greater trust and accountability, while disintermediating data aggregators,” said Arun Baid, Global Delivery Head for Insurance, Cognizant.
“The shared infrastructure provided by the distributed ledger, smart contracts and non-repudiation capabilities of blockchain can dramatically enhance the insurance value chain, and pave the way to greater automation in requesting, exchanging and entering data. The partnership between our consortium and Cognizant is a significant step forward in leveraging the long-term strategic benefits of the technology and turning better customer experience into a competitive advantage,” said V. Viswanand, Chief Operating Officer, Max Life Insurance.Apart from financial services and banks, who have been actively looking at using blockchain technology, it also has the potential to revolutionise supply chain, agriculture, stock markets, food safety and others.