Insurance News

Blockchain VeChain partners with Chinese insurer PICC

PICC People's Insurance Company of China

Chinese blockchain VeChain refers to itself as the ‘enterprise level’ public blockchain. Today the organization announced that it’s partnering with insurer PICC and DNV GL to create new blockchain insurance solutions. DNV is a global quality assurance and risk management company (revenue $2.3bn) which invested in VeChain in May. People’s Insurance Company of China (PICC) is listed, but majority owned by the state and is one of largest non-life insurers in China.

PICC chose VeChain because of its existing relationship with DNV which is particularly active in the marine and energy sectors.

George Kang, CEO at DNV GL Business Assurance Greater China Region 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.”

The blockchain aspect will operate in the background, and they will mainly use the technology in the claims process. Today the claims process involves significant paperwork, and sometimes data is not sufficiently validated or audited. No doubt DNV will participate in the validation process.

The VeChain statement also refers to the use of the combination of IoT and smart contracts to enable instant compensation. This is often referred to as parametric insurance where based on specific criteria, a payout is automatically made without the need for a claim. Ledger Insights has written about parametric insurance in the context of health and commercial insurance.

The hoped impact for PICC is to reduce turnaround time, prevent fraud and improve Know Your Customer compliance. The net effect could result in reduced premiums.

VeChain and the Chinese government

VeChain occupies an awkward position in the blockchain space for multiple reasons. The organisation is based in Singapore but started in China and does much of its business in China.

The Chinese authorities promote the use of blockchain in the enterprise, and a recent PwC survey indicated China could be the global leader within a few years. The head of blockchain for PwC in China is part of VeChain’s team.

However, the Chinese authorities also have serious concerns about cryptocurrencies, and there’s a widespread crackdown in China. Just last week all the major social media companies blocked cryptocurrency channels. However, VeChain is both an enterprise player and has its own token. And PICC is government owned.

Additionally, there are concerns in the West about blockchains associated with China. In China, government oversight and influence is a normal part of conducting business. But as that’s less so in the West, there are concerns about the potential for backdoors allowing authorities to view transaction details that are intended to be private.