In the formative stages of RiskBlock Alliance, The Institutes discussed the importance of aligning a handful of insurer and brokerage members behind the development of a specific digital application for use on the Canopy platform. Proof of insurance perfectly fit the bill, given its relative simplicity.
At present, when two people are in an accident, the social compact is to exchange each other’s insurance information. Each driver typically photographs the other person’s proof of insurance and then presents this information to his insurance agent or carrier in preparation for the next stage in the insurance claims process—first notice of loss.
“We felt it would be a great test for us to undertake, as it isn’t difficult from a technical perspective,” says Seth Flory, vice president of IT strategy and technology innovation at Nationwide Insurance, which co-led the proof of concept initiative with Farmers Insurance. “There was much efficiency to be gained by having a digital alternative on the blockchain. Both insurance companies are alerted of the incident, triggering the first notice of loss.”
Instead of having each party to the car accident email a photo of the other party’s proof of insurance to their insurers, they generate a QR code on Canopy that provides proof of their insurance, which the other party scans. “This is real phone-to-phone connectivity and data exchange,” Flory says. “And it takes anxiety out of the process.”
Asked what he meant, Flory says one never knows if the other person’s paper-based proof of insurance is the real thing. “There’s a lot of emotion produced in the aftermath of an accident,” he adds. “Perhaps someone is hurt. Maybe the person is at fault. The car is damaged, and it might be the first time this has happened.”
Aside from the value to policyholders, carriers benefit by improving back-office efficiencies, says Vishal Garg, senior enterprise data architect at Farmers Insurance. “By putting this on the Canopy platform, the typical back-and-forth emails and phone calls that occur between carriers to verify the policyholders’ proof of insurance is eliminated,” Garg explains. “It’s typically a five- to 10-minute phone call just to get basic data. Now that information is right there in the blockchain.”
Down the line, Flory can see other value accruing to the proof of insurance application. “What happens when law enforcement pulls over a car today for some infraction—the police officer asks for evidence of insurance, which is typically stored in the dashboard,” he says. “The driver now reaches into the glove compartment, creating a moment of anxiety for both parties, particularly if the incident occurs on a dark night. By syncing up the law enforcement community on the Canopy, they can immediately have proof of insurance when they run the person’s license plate.”