PwC: Blockchain - a game-changer for InsurTech
Consultancy company PwC is at the frontier of exploring innovative applications for blockchain technology, with InsurTech emerging a likely victor.
Upon reflection, the benefits for insurers are clear: unalterable ledgers, enhanced transparency and security, reduced costs and smoother transactions, to name a few. However, in its case study ‘Using blockchain to transform insurance claims’, PwC suggested that the industry may be at a crossroads:
“The technology is designed to foster trust, but companies may face doubts about its reliability and security. This is the challenge that both PwC and clients must address to realise blockchain’s potential and benefits.”
As such, insurance market representative London Market Group asked PwC to develop a ‘proof of concept’ (POC) demonstrating blockchain’s efficacy.
Putting a ‘claim on the chain’
PwC’s assessment of the insurance market’s attitude is seemingly substantiated by former Director of Operations at Lloyd’s Shirine Khoury-Haq: “Blockchain has the potential to improve the way insurers record risk, increasing the speed, accuracy and transparency of our processes. But we needed to test that it really delivers.”
To help demonstrate this principle to the wider industry, PwC initiated two design workshops in order to find out the ‘pain points’ in insurance processes and how blockchain could help. To this effect, it worked closely with brokers, claims experts and third-party administrators.
The first stage of the project used PwC’s pre-existing platform created by its UK Blockchain lab powered by Monax. The software was put through a series of ‘sprints’ in order to identify weaknesses, strengths and areas for improvement in order to deliver a minimal viable product (MVP).
During the second stage, the company worked with Guidewire to integrate its ClaimCentre management tool into the blockchain POC.
The result’s of PwC’s POC
Completed within a six-week timeframe and including 14 firms within London Market, the POC was considered a success by PwC, with significant overall performance results reported.
These included no ‘single point of failure’, a reduction in reconciliation errors and an enhanced ability to validate claims automatically. Therefore, transparency was significantly improved, as anticipated, and the overall results were more consistently high quality.
“This was a complicated project but well-suited to blockchain technology and we proved this concept,” concluded Steve Davies, Blockchain Leader at PwC. “Blockchain can be commercially deployed to great effect.”
