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ANZ and IBM are currently working with Suncorp New Zealand to develop a blockchain solution for the insurance industry, aiming to streamline the payment reconciliation process between brokers and insurers.
The current process of reconciling policy information and premium payments is ‘slow and painful,’ according to ANZ Institutional NZ managing director Paul Goodwin, and the blockchain solution will make the process faster, more visible and more secure.
“The idea began around the bulk payment made between the broker and the insurer, and we’re looking at how that could fit within blockchain technology,” ANZ director Matt Hearley told Insurance Business. “It would eliminate the need for splitting each payment down to the individual policy level by holding a single source of truth. We’ve looked at several emerging technologies and thought that blockchain would be a good fit, especially if you look at on a multilateral level with many different insurers paying many different brokers.”
According to Shahid Saiyad, the blockchain leader for IBM New Zealand, the technology has a number of advantages that would put it above and beyond traditional business methods.
“Looking at current technology and the people involved, it’s when you have multiple companies and people reconciling their records that business friction comes in,” Saiyad said. “Blockchain aims to address these issues.
“The key advantages of blockchain are, firstly, that the records are immutable,” he said. “You have a clear trail which all three parties – the broker, the insurer and the bank – can defer to, and no one party can manipulate the data, either knowingly or unknowingly. Secondly, it’s completely secure – only people who are authorised by all three parties are able to log in and update or append the data. And thirdly, there is finality to every transaction – it shows receipt of payment and how the bank has processed the payment to the broker. When you consider these things, this technology is truly transformative and makes things much, much easier.”
The project is the first of its kind in New Zealand, and Suncorp has developed a proof of concept to test the solution’s viability. ANZ and IBM have released a white paper on the technology and the benefits it can bring to the insurance industry.
