Thirteen Indian insurance companies have rallied together to use a blockchain-like technology to create a central repository of policyholder data, to avoid repeating the registration procedure for holders of multiple policies.
“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,” said Akshay Dhanak, Vice President of Business Systems & Technology at HDFC Life Insurance, speaking to Business Standard.
A whole 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 avoided by having the entire data set on blockchain.
Global advisory firm EY will be facilitating the Indian consortium through tieupswith multiple technology partners. “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),” said Sachin Seth, technology partner at EY.
Mr Mohit Rochlani, Chief Operating Officer, IndiaFirst Life Insurance, 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 evolves, he said, it would help in reducing 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. This would reduce costs.