Expert opinions, FINANCE

Blockchain insurance advancements

Alexander Kreiderman, VP for IT, Renaissance Insurance Group

In the insurance industry, blockchain technologies’ most interesting prospects are in dealing with customers and partners, which requires stable and intensive exchange of large volumes of information. The first project already implemented in Russia’s insurance market is a blockchain project developed jointly by Renaissance Insurance Group and Delovye Linii (Business Lines) freight forwarder and based on Hyperledger IBM. At the moment, there are two participants in the project, but in the future it will also be joined by service companies dealing with claims settlement. The system can be accessed by various units of both Renaissance Insurance Group and Delovye Linii. Some of those units are in charge of validation, others of storage and smart contracts performance, one more unit sets transactions and deals procedures.

Employing a blockchain technology in the project allows accumulating detailed information on all cargo transportation parameters. The system contains details of an insurance contract, insurance pricing, all cargo specifics (including any traffic rout changes, details of dispatchers and recipients and many other aspects), of all means of transportation involved, and detailed information on any cargo damage or any loss occurrence. It effectively replaces a traditional paperflow and dramatically reduces handling costs and, subsequently, the insurance cost to a customer.

The blockchain system currently in place provides for:

  • detailed pricing breakdown and risk factors. Once a price is calculated online, a customer makes a smart contract;
  • automated business processes and hence reduced chances of a mistake; accelerated paperflow; time efficient claims smart settlement; reduced data procession costs. Eventually, servicing quality improves and customers’ satisfaction grows;
  • increasing deals number without visible costs upgrowth;
  • system adjustment rate acceleration;
  • accumulation and analysis of huge volumes of freight traffic parameters by routs, cargoes, contracts, clients, etc.

On the basis of such information the system can produce detailed recommendations which the freight forwarder or the insurance underwriter can submit to each customer in order to arrange the most suitable transportation with minor risks. They can advise on the safest and fastest routs, appropriate packaging and many other parameters. Those customers who follow the said recommendations will certainly be eligible for application of reduced charges for cargo shipping insurance. The system offers best rates to best customers.

In its immediate plans, Renaissance Insurance Group intends to employ the distributed system to fully abandon traditional correspondence. In the future, reimbursements payment will be an automated process, while a proper analysis will ensure cross-sales of insurance products to various customers. By processing the data available, the blockchain system will permit to produce for each customer an offer, tailored to exact needs and business specifics.

Renaissance Insurance Group aims to implement blockchain technologies in popular insurance products such as overseas travel insurance, comprehensive coverage, property damage insurance, etc. Renaissance Insurance is set to use for these insurance products the broadest automation through reliance on blockchain technologies.

Further on, to increase access points, Renaissance Insurance’s blockhain systems will involve vehicle service stations, customers’ mobile applications, and partner systems.

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