HCL Technologies and R3 launch blockchain insurance platform
New York-based R3, one of the largest enterprise blockchain companies in the world with a client ecosystem of over 300 firms, helped HCL design the new service, which will enable the Indian insurance companies to streamline and bolster policy creation with real-time data streaming, cryptographic security and immutable record keeping.
Insurtech grows in APAC
A recent surge in interest within the region, which was noticed by in early April 2020, can almost certainly be linked to the COVID-19 pandemic as operational difficulties and shifting customer spending habits are redefined in the new normal:
“While the consequences unfold, insurers should start to prepare for the future, by accelerating the digitisation of their operations and planning for business opportunities ahead,” said Angat Sandhu, Partner and Head of APR Insurance, and Prasanna Patil, Principal - Insurance at Oliver Wyman.
In their article, the two postulated that APAC insurance would change in three waves:
- Businesses will struggle and some will decline as customer spending power decreases owing to job loss, illness, etc.
- Next, insurance claims will rise as COVID-related eventualities strain credit lines.
- Finally, a renewed interest in insurance products will take place.
However, regarding this latter point, it is unlikely that interest will return to the same types of product as before. Digital innovations, such as HCL and R3’s collaboration, are likely to shape a revitalised industry, an opinion shared by Harshveer Singh, Partner at :
“It's a much younger region, and the adoption of e-commerce and digital has been incredible. Openness to tech brands, supported by very friendly, benign regulators who are creating sandboxes for experimentation to happen.”
As APAC insurtech continues to incorporate blockchain, cloud, AI (artificial intelligence) and other technologies, the region’s customers could expect to see the customizability, affordability and convenience already being experienced by the industry’s US and UK counterparts
Anti-fraud technology firm FRISS raises US$65mn in funding
FRISS, a technology firm specialising in anti-insurance fraud and provider of AI-focused insurance fraud prevention products, has today announced it has raised US$65mn in Series B funding to expand its business and develop new products. Led by private equity firm Accel-KKR, the round was endorsed by investor Aquiline and advised by FT partners.
The company, active in more than 40 countries worldwide, will aim to save insurers around US$2bn in capital obtained from fraudulent activity this year alone. “We’ve been around for 15 years and completed over 200 implementations,” said Jeroen Morrenhof, FRISS CEO and co-founder.
“FRISS is ready to scale exponentially through our Series B, taking our mission of accelerating safe digital transformation throughout the policy lifecycle to the next level,” Morrenhof added.
How does FRISS’ anti-fraud technology work?
The technology used by FRISS to detect fraudulent activity integrates artificial intelligence (AI) to help insurers reduce losses and increase operational efficiency. The company said it offers real-time end-to-end P/C insurance fraud analytics products and services covering the complete lifecycle of the policy, including automated underwriting risk assessment to fraud detection during claims and comprehensive case management.
Alerts are displayed via integrations with core systems such as Guidewire, Duck Creek, Sapiens, and Keylane. In addition, the system can pull additional information from various available data points to create a “holistic view of the risks attached to each policy request, renewal, or claim,” the company said.
Insurance fraud and ghost broking
Leading UK car insurance firm Aviva found more than 12,000 fraudulent claims were made in 2020, totalling more than £113mn. This amounts to 33 claims per day or one every hour. The company expects insurance fraud to increase due to the financial strain brought about by the coronavirus pandemic. It also found that more than 19,000 claims were under investigation for fraud whilst fraudulent policy applications and Ghost Broking grew by 34%. Ghost broking is a type of insurance fraud predominantly affecting the car insurance sector. It involves a fraudster or scammer targeting higher-risk individuals such as newly qualified drivers and elderly people, pretending to be either an insurer or someone who can purchase insurance on a driver’s behalf.
They tend to advertise their services on social media, university campuses, pubs, and students forums, promising cheaper insurance. After claiming to have purchased insurance successfully, they then cancel the insurance and leave the victim with no cover. They may also forge insurance documents or falisfy a driver’s details, invalidating the policy.