Blockchain could ease insurance contract communicationsReprints
LAS VEGAS — Blockchain, or digital ledger technology, will allow parties to insurance contracts to share information more easily, but it is still finding its place in the insurance industry, according to a panel of experts speaking at the InsureTech Connect Conference in Las Vegas on Wednesday.
Blockchain could help improve what can be imprecise communications among parties, the panelists said.
“Nine times out of 10, the dispute arises from a miscommunication,” said Greg Hoffnagle, special counsel with Cooley LLP in New York, who added that much of his practice deals with such disputes in the reinsurance space.
“In the insurance, reinsurance and retrocession area, when you are passing information up the chain, everybody that is up the chain relies on the people down the chain, but there’s really no way to verify information you’re getting is actually correct,” Mr. Hoffnagle said.
“The principle of just passing information up and down the chain is just not right for the future,” said Zia Zaman, MetLife Inc.’s chief innovation officer for the Asia region in Singapore.
One relevant application, or “use case,” for digital ledger technology would be “having one centralized area of information that everybody gets to use from the beginning,” Mr. Hoffnagle said.
One focus for those developing the technologies is to ensure that systems are compatible.
“Every tech firm and consortium is actively working on interoperability,” said Susan Joseph, an adviser for B3I CEV LLC in New York. “Nobody wants silos, It’s an extremely cooperative group.”
“At the application layer, they are solving for gaps between platforms,” said Jeff To, global head of insurance for Salesforce in New York.
He encouraged casting a wide net.
“It’s OK to adopt multiple platforms,” Mr. To said. “The market hasn’t consolidated, it’s still fragmented. It’s OK to kick the tires.”
Regulators will want to be involved if the insurance industry is doing something new, however.
“They will want to understand it” if insurers implement digital ledger technology in underwriting or elsewhere, Mr. Hoffnagle said. “They will want to understand why, how. Get them involved early.”