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The honor of the Insurance Underwriting Team of the Year (all property/ casualty) category of Business Insurance’s 2018 U.S. Insurance Awards goes to American International Group Inc. for its work with Standard Chartered Bank P.L.C. and International Business Machines Corp. using blockchain, or digital ledger technology, to create a “smart contract,” an insurance policy that uses technology to execute specific functions and automate processes.
The emerging technology had piqued AIG’s interest.
Blockchain technology “was something we had heard about and were looking at,” said Carol Barton, New York-based president of AIG Multinational. “We decided to see if we could work with a client which was interested.”
Blockchain can generally be thought of as a public ledger, such as what underpins bitcoin, while digital ledger technology is more broadly inclusive of proprietary/private peer-to-peer ledgers.
The bank, an existing insurance client, was also interested in blockchain/digital ledger technology.
“Standard Chartered Bank was very motivated, having already started exploring this from a banking perspective,” Ms. Barton said.
AIG also looked to an existing relationship in choosing a technology partner.
“We had done various work with IBM in the past from a technology standpoint, so they seemed to be a logical partner,” Ms. Barton said. “We have a strong relationship, and they are leading the way in working with hyperledger fabric.”
Hyperledger Fabric is a blockchain framework implementation and one of the Hyperledger projects hosted by The Linux Foundation.
The partners sought to address some of what they saw as key problems, such as eliminating silos of information and improving efficiency, particularly in regard to highly complex cross-border transactions that meet regulatory requirements in each jurisdiction.
AIG sees promise in the results of the project and potential further applications.
“I think the project illustrated that we can reduce friction, saving time and manual effort and producing fewer errors,” Ms. Barton said. “I think the goal is to operationalize it and then look at other areas where it would be beneficial.”
• FM Global
• Victor O. Schinnerer & Co. Inc.
• XL Group Ltd.
• Zurich North America
Business Insurance recognized achievements by outstanding executives and teams of professionals working in the field of risk management and commercial insurance at its inaugural U.S. Insurance Awards presentation in New York on March 8.