We asked Carol Barton, president of AIG Multinational, about AIG’s first blockchain smart insurance contract.
At what trigger do you consider this a success?
The pilot achieved its goals. Because of this partnership with our clients, we have a better understanding of this new technology, how it works, and its potential.
What kind of efficiencies and cost savings do you foresee by using blockchain for your contracts?
Any technology, including blockchain, that can increase trust and transparency for an industry whose pillars are built on that should be fully explored.
While it is still preliminary, blockchain’s value could be enormous in terms of building more effective and cost efficient processes. The pilot demonstrated how permissioned individuals across the insurance value chain can check instantly whether cover is in place, if premiums have been paid, and whether claims have been filed or paid, reducing the need for numerous phone calls and emails, which in turn will reduce costs and provide timely certainty and transparency.
This pilot project is an important step forward.
Would using blockchain enable you to sell more coverage in the future?
We specifically chose to execute the pilot within one of the most complex areas of our business to test its limits. The results are promising for business expansion, particularly the demonstrable ability to onboard additional stakeholders, such as banks and brokers, within the ledger.
No broker was involved in this contract. Do you see using more smart contracts to bypass brokers in the future?
Our key driver for this initiative was to explore how we might leverage emerging blockchain technology to increase trust and transparency in the insurance value chain—core values that our industry is founded upon. We are focused on how we can learn from this pilot so that we can deliver operational efficiencies for our clients, our broker partners and AIG.
Do you foresee commercial brokers creating these contracts for insurers?
When looking across the spectrum of clients and the risks that they face, there is no “one size fits all” solution to delivering insurance protection. The answer may be different depending on the specific needs and complexity of each client. At AIG, we are committed to partnering with our clients and brokers to deliver innovative solutions that meet their risk, governance and contract certainty objectives.