ANZ, IBM and Suncorp New Zealand are working together to develop a blockchain solution for the insurance industry that will help make the data transfer and payment reconciliation process faster and more transparent between brokers and insurers.
Blockchain, a distributed ledger technology, is a secure and decentralised way of sharing data and transactions.
“Reconciling policy information and premium payments made by a broker to an insurer on behalf of customers is a slow and painful process,” said Paul Goodwin, ANZ managing director, institutional, in New Zealand.
ANZ said the current insurance process was not efficient because the data held by brokers and insurers could be different.
That created challenges for the insurer in allocating payments received to the correct policy.
The new proof of concept established that a distributed ledger could provide this “single source of truth”, removing the need for reconciliation and rework throughout the process, as well as eliminating the exchange of manually-created documents.
ANZ said it had seen a particular pain point around the reconciliation of the monthly bulk payments made by a broker to an insurer to pay for all policies.
It focused on the efficient transfer of data throughout the process of quoting to issuing an insurance policy, removing the need for keying and reconciliations at various stages throughout the process; the automated allocation of a bulk payment by a broker to the individual policy level for an insurer; and the removal of the manual generation of operational reporting, and the ability to automatically generate insightful reporting to aid management decisions
“The blockchain solution will be much more efficient for the industry as well as being very secure. As a ‘single source of truth’, it will provide greater visibility throughout the process, remove uncertainty and help make response times faster,” Goodwin said.
“This technology will work with existing industry solutions to capture relevant information, ensuring payments can be forecast and made without the need for reconciliation.”
Mike Smith, IBM’s managing director in New Zealand, said distributed ledger technologies could drive major efficiencies when they were able to turn complex, manual processes into real-time systems..
“IBM used design-led thinking principles and practices to reinvent the business processes behind intermediated insurance at ANZ.
“The result is an interoperable network that could not only decrease policy costs and improve customer service, but also build a foundation for the introduction of other transformative technologies, such as artificial intelligence.”
Tim Buckett, chief financial officer at Suncorp, said the insurer was always looking at ways to work more efficiently.
This was a way to speed up the reconciliation process for insurance premium payments, while at the same time improving the customer experience for policyholders and our business partners, he said.
A key concern is maintaining confidentiality between the parties involved.
This proof of concept considered this, using encryption to protect all data but also implementing channels, so only the data relevant to that party being sent to them.
With this, a future ecosystem with multiple insurers and multiple brokers is a viable outcome.
This would unlock the potential of this solution and allow the industry to unlock further process efficiency and greater visibility, ultimately improving the proposition for the insured parties.
