AIA have chosen to address the opportunity of Blockchain in two parallel programmes. The first is to pursue industry opportunities to collaborate with other insurers and banks to try to understand and build Know Your Customer (KYC) solutions. At the other end of the customer journey AIA are focusing on claims and using smart contracts so that in the event of a claim, that claim is verified by third parties, automatically triggering the execution of the insurance contract terms without the need to file a claim at all.
The Digital Insurer Asian Insurance Innovation Award
A brief history of Innovation at AIA
Since 2014, The AIA Edge team has been focused on emerging technologies that can provide opportunities for AIA to solve some of the challenges that are apparent in our business. Of the many initiatives that have been untaken, we have taken the decision to share our understanding of blockchain and the insurance use cases that result from that learning and building. In the same way we have openly shared our #AIAAcceleratorprogramme and its outputs to the public, this open collaboration continues to underscore our commitment to lead by example and do good for the communities and societies that we serve as the leading pan-asian Life and Health insurer.
AIA’s Blockchain Journey
As part of the Edge team remit, we are charged with scanning the horizon for disruptive technologies and services that present opportunities and challenges to our industry and indeed to AIA. Whilst blockchain (or distributed ledger) technology has been on our radar for some time, it was only with the advent of Ethereum and the possibility of “smart contracts” and “smart contract code” that we decided that now was the time to get to grips with and form a deeper understanding of the technology and its implications for insurance more specifically life and health insurance. Having come to the conclusion that Blockchain and DLT could potentially be transformative for our company and our industry we recommended to our leadership that we should get on and actively participate in setting the agenda on learning more about how DLT could benefit our customers, our business and our industry. We formally joined the R3 consortium in June of this year, the first multinational insurer to do so. Staying true to our company’s purpose to play a leadership role in driving economic and social development all across the (Asia-Pacific) region, we want to ensure that the use of DLT benefits all of the countries in which we operate. That means discovering valuable uses for the technology which enhance customers lives, reduces costs for our industry and solving the challenges which we all face.
What are we doing?
AIA have chosen to address the opportunity of Blockchain in two parallel programmes. On one track we will pursue industry opportunities to collaborate with other insurers and banks to try to understand and build Know Your Customer (KYC) solutions which can help the whole financial services industry reduce the costs associated with this complex and in many cases people intensive function. By doing so we believe that not only will we see a more streamlined and simpler process for the customer but also begin to lay the foundations for the elimination of identity fraud. As we increasingly live our lives online this will help to increase trust in the financial services industry.
Looking after and investing customers’ premiums is also ripe for disruption with opportunities to address complexity in the relationship between insurers ad custodian banks in the area of collateral management, OTC securities trading and other complex financial transactions. We have already begun actively looking at solutions to these issues.
At the other end of the customer journey making the claims process as pain free as possible which for our customers is usually at a very stressful period of their lives is another active target of our attentions. Using smart contract code, we see a time when, in the event of a claim, that claim is verified by third parties, automatically triggering the execution of the insurance contract terms without the need to file a claim at all. To this end, by the time of the conference we will have a working prototype of a personal accident insurance policy residing on a blockchain that is simple to setup, store and claim.
Why should we win?
AIA’s bias to build, to understand the technology sets us apart from the competition. Our openness in sharing our knowledge with the rest of the industry exemplifies our commitment to develop our industry for the good of all our customers. Making insurance more accessible, simpler and easier will go some way to address the protection gap that exists in Asia. Learning together and sharing our knowledge with our competitors and peers will bring this technology to bear sooner as we can develop industry standards, interoperability and excellence in an innovation space that will only succeed if we all work together.