Yesterday, Chinese media outlets reported that the Bank of China’s Insurance IT arm has launched an insurance blockchain with multiple partners. The industry-level project currently stores electronic policies on the blockchain for transparency and efficiency.
Interestingly, the platform uses Hyperledger Fabric, not a domestic blockchain like most Chinese initiatives. Sina Finance reports that it stores policy information in one place, which streamlines the reconciliation process and protects the data from tampering. This is crucial for insurance sold through banks, where if a policy changes, the bank, insurer, and reinsurer must all reconcile to ensure their policy versions are the same.
The news site further claims that by September, the Bank of China had accumulated over 4 million policies uploaded digitally. More insurers are currently testing the platform and preparing to join.
The bank and its partners plan to expand the project by admitting different types of insurance institutions and industries. Hummingbird Finance claims that new members may be added as nodes. With more participation, there is greater scope for using big data resources and improving anti-fraud and -money laundering efforts.
Perhaps the Bank of China chose Hyperledger, rather than popular local products such as Ant Financial’s, after its partnership with IBM. The firms announced their collaboration last month for financial innovation. The bank is also involved in the Bay Area Trade Finance Blockchain Platform (BATFB) and was the first client of a Hong Kong property initiative.
In insurance, there are various blockchain applications on the go. Yesterday, Aon’s project in the agricultural sector reported on its successes and challenges so far. MetLife said that it found data preparation harder than the blockchain angle. Meanwhile, in China, Alipay’s health blockchain is mostly focused on insurance claims, and the People’s Insurance Company of China (PICC) has partnered with VeChain.