A consortium of Indian life insurers has partnered IT services company Cognizant Technology Solutions to develop a blockchain for sharing data across companies, a joint statement on Monday said.
Besides letting firms share information, the solution will help insurers reduce their reliance on data intermediaries and aggregators for obtaining customer and policy details. These details relate to Know Your Customer, financial and medical underwriting, risk assessment, fraud detection, and regulatory compliance, according to the consortium.
For insurers, the technology also aims to reduce the risk of data breaches, fraud and money-laundering. For customers, it aims to deliver better performance through improved process efficiency and record-keeping, as well as accelerated turnaround time.
The solution, developed late last year as part of a blockchain programme undertaken by the consortium, is built on Corda, a distributed ledger platform developed by enterprise software firm R3 and hosted on Microsoft's Azure cloud infrastructure.
"As a shared source of truth, blockchain opens numerous possibilities for insurers to collaborate more effectively and transparently, make better informed decisions, and create greater trust and accountability, while disintermediating data aggregators," said Arun Baid, global delivery head for insurance at Cognizant.
Commenting on the technology, Anand Pejawar, president, operations, IT and international business, SBI Life, said: "With its model of immutable and decentralised data, and its ability to prevent tampered documents and false billings from falling through the cracks, blockchain can enable insurance providers to introduce new models, re-invent processes, and increase capacity."
The insurers’ consortium comprises of SBI Life Insurance, Max Life Insurance, Canara HSBC OBC Life Insurance, Edelweiss Tokio Life, and IDBI Federal Life Insurance. Others in the consortium are Birla Sun Life Insurance, HDFC Life, Kotak Life, Tata AIA Life, PNB MetLife, IndiaFirst Life Insurance, ICICI Prudential Life Insurance, Bharti AXA, Aegon Life, and SUD (Star Union Dai-ichi) Life Insurance.
The solution is also expected to reduce data storage costs for insurance companies by avoiding duplication of procedures, and streamlining approvals. V Viswanand, chief operating officer, Max Life Insurance said blockchain can pave the way to greater automation in requesting, exchanging and entering data.
Insurance companies are not the only ones working on blockchain to reduce the risk of fraud. Indian peer-to-peer (P2P) lending startups are considering a private blockchain to facilitate sharing of information as a risk-mitigation strategy, and to identify fraudulent loan applications. https://www.techcircle.in/2018/03/29/p2p-lending-startups-mull-blockchain-tech-to-share-info-curb-fraud
The Economic Times had reported that P2P companies, including larger players like Faircent, as well as new startups, such as IndiamoneyMart, PaisaDukaan and OMLP2P, are looking to pool in money to create a private blockchain. The companies may have already applied for an NBFC P2P licence from banking regulator, the Reserve Bank of India. NBFC is non-banking financial company.
Recently, in an interview with TechCircle, Jitan S Chandanani, blockchain leader at tech giant International Business Machines Corp., said IBM was working with banks, fast-moving consumer goods’ firms, and small and medium enterprises to deploy blockchain in India.