A big technology support company is helping to find out whether blockchain technology can improve the nervous system of the world’s life insurance industry.
The company, Cognizant, has already developed a blockchain-based data exchange system for a consortium of life insurers in India.
The life insurers are hoping the system will help them speed up and improve many processes, including underwriting, fraud detection and regulatory compliance, Cognizant said Tuesday.
The companies in the consortium are also hoping the system will reduce the risk of data breaches, fraud and money-laundering when they do exchange data, Cognizant said.
A blockchain-based system stores information using a continuously growing, encrypted collection of records, or blocks. To keep anyone from changing the records without being detected, each new block includes a date, and an encrypted version of the previous block. Promoters of blockchain systems say a blockchain system can provide an open, “distributed ledger,” or transaction archive, that can be stored on a network of computers.
Some people are using blockchain technology to create “cryptocurrencies,” or systems, such as Bitcoin, that can store purchasing value for a user.
The blockchain-based system in India will simply help the life insurers in the data exchange consortium share data with one another, not create an alternative to Bitcoin.
Cognizant — a company based in Teaneck, New Jersey — used the Corda distributed ledger platform to create the new blockchain-based data exchange system. The Corda platform was developed by R3 and is hosted on Microsoft Azure computers. R3 has an office in New York.
The list of companies in the consortium includes many insurers based in India. The list also includes Indian-based affiliates of companies with headquarters in the United States or Europe, such as Edelweiss Tokio Life, Birla Sun Life Insurance, PNB MetLife Insurance, Bharti AXA, Aegon Life and SUD (Star Union Dai-ichi) Life Insurance.
U.S., European and Japanese insurers use Cognizant to help support life and annuity operations all over the world. If the new system in India is successful, companies like Sun Life, MetLife and Aegon could see it as a model for developing and implementing blockchain-based data exchange systems outside of India.
— Read MetLife Outsources IT Work To India on ThinkAdvisor.