Around 12 Insurers including HDFC Life, India First Life and Canara HSBC OBC, have jointly begun the country’s first blockchain project in the financial services industry to help rein in costs for companies running medical tests and evaluations, and to ensure confidentiality and security of the data collected from individuals.
They have tied up with IBM and Cateina Technologies to create a blockchain-based solution. The concept is based on distributed ledger technology, and helps participants to work on common areas of interest. It is expected to help in improving business by providing customer KYC, claims history, medical records, and agent track records while flagging fraudulent transactions.
“Blockchain technology has the potential to change the way financial services transactions are carried out,” said Subrat Mohanty – senior executive vice-president, head-strategy, HDFC Life.
Life insurers spend a lot of time and effort in identifying and validating records multiple times for the same customer. Currently, each insurance company in India conducts medical tests for potential customers. A panel of doctors determines their health status and evaluates insurance eligibility.
Mohanty said blockchain would reduce these inefficiencies and provide a record of information that can be accessed in a secure manner.
“The insurance industry can leverage blockchain technology in a significant way to transform their processes across the insurance value chain, such as claim fraud detection and claim settlement,” said RM Vishakha, CEO, IndiaFirst Life Insurance. “Blockchain technology will also help enhance customer experience and impact distribution efficiencies.”
Blockchain is expected to have a direct impact on reducing operational costs and improving efficiencies. Although the technology is still in its nascent stages of commercial deployment, insurers say there is a need to form policies and procedures to ensure that personally identifiable information and health information are always protected.
“This platform will give insurance companies the option of cutting down on operational costs on getting information that is core to the underwriting process in a trusted manner by keeping in line with the privacy regulations. On scaling up, if we can create social scorecards of medical providers then one can actually rate them for future customer’s reference,” said Jitan Chandnani, partner, Blockchain Leader, IBM.
