The People’s Insurance Company of China (PICC), one of the largest insurers in the world, has struck a deal with blockchain technology firm VeChain to bring forth a digital transformation within the otherwise-stagnant insurance industry.
PICC announced Sep 1, 2018, that the new partnership with VeChain will help it leverage the rich offering of blockchain technology and artificial intelligence to boost operational efficiency. The expected benefits include a reduced turnaround time, prevention of fraud, a better Know-Your-Customer (KYC) compliance, and an improved claim experience for customers.
An Upgrade From Legacy Claim Management Systems
The switch to a blockchain-powered operational apparatus will help the PICC to get rid of the legacy claim management systems that rely on “overwhelming paper trails on insufficiently validated data that make up the current policy underwriting process,” the company said in a press release.
It further stated that the inefficiencies resulting from the paper-driven approach make the system prone to flawed or delayed data collection, as well as inefficient verification and auditing processes. All these factors then combine to cause policies to be allocated to “bad actors”, which in turn, leads to a price surge for all policyholders. Therefore, the deal is believed to turn the cost-benefit ratio further in favor of PICC policyholders.
Under the new agreement, PICC will collaborate with VeChain investor DNV GL, a global quality assistance and risk management company, to tap in on the power of artificial intelligence to replace the existing manual approach and eliminate the scope for human errors in key operational areas.
Speaking of Company’s collaboration with PICC, the DNV GL Chief Executive George Kang said:
“The role DNV GL plays is to ensure data integrity from the business operation perspective. In conjunction with VeChainThor Platform, we will provide a robust digital trust platform to assist PICC with enhanced data management and efficient data processing.”
Insurance Sector is Warming up to Blockchain
As the agreement comes into effect, VeChain will initially extend its support to improve several pre-selected use cases. This will enable PICC to fine-tune its infrastructure to the new technological paradigm it aims to operate in. DNV GL will also chip in by providing its expertise as a globally-approved independent third-party assurer to help PICC’s move to switch to blockchain-powered systems.
PICC is optimistic that the proposed digital transformation will yield in the creation of new value propositions and provide a gateway for PICC customers and competitors to a mutually beneficial broader collaborative ecosystem.
Overall, the insurance sector seems to be heading towards the forefront of the race to tap in on the still-nascent but potentially revolutionary blockchain technology and its offshoots.
In August 2018, MetLife, another big player in the global insurance industry, kicked off the world’s first blockchain-based automated insurance solution in the company’s innovation center in Singapore. The aim of this ongoing experiment is to offer pregnant women insurance protection in the wake of health issues such as gestational diabetes without even requiring a claim.
Featured image by xiaoyi-Dou