Allianz Succeeds in Testing Blockchain for Captive Insurance Program

Allianz Global Corporate & Specialty has announced the successful implementation of distributed ledger technology for a captive insurance program involving cross-border fund transfers.

Allianz Global Corporate & Specialty (AGCS), a subsidiary of German insurance giant Allianz SE, revealed some details about the successful results of a blockchain-based pilot project aimed at streamlining international insurance transactions. 

AGCS board member Hartmut Mai said in a company statement:

“We are currently seeing many blockchain applications in the financial services industry and are eager to explore the potential of this exciting technology in the corporate insurance segment.”

During the trial run, Allianz Risk Transfer (ART), a subsidiary of AGCS, collaborated with Ernst & Young (EY) and digital agency Ginetta. The former provided blockchain advisory services, while the latter created the user interface.

The AGCS report noted that transfers and updates within a blockchain system are executed in real time.

“This creates a much faster, transparent, secure and efficient means of distributing information, conducting business processing and recording transactions across multiple parties,” according to the document.

The blockchain-based prototype developed by Allianz utilizes the Hyperledger Fabric 1.0 framework and targets professional indemnity and property policies. These policies reside in a captive insurance program available at company divisions in the US, Switzerland, and China.

“It translates core process flows in the captive insurance cycle into the distributed ledger environment and helps decrease the time from start to policy, policy to premium and claim to settlement,” the press release noted.

ART also collaborated with Citi Treasury and Trade Solutions, which supported Allianz with the payment processing solutions.

Tapodyuti Bose, who runs Citi’s global channel, enterprise and account operations, commented as follows:

“Citi is very proud to have been able to help Allianz achieve this industry milestone. By leveraging innovative, new technologies, we are able to partner to design new business models and rapidly implement them in a matter of weeks.”

ART principal Yann Krattiger said that the blockchain-based experiment would help to speed up and simplify ordinary transactions and fund transfers between insurers and customers.

Captive programs are among the most sophisticated insurance areas. According to AGCS, blockchain technology can easily connect all the entities involved, from the captive management to local subsidiaries and the fronting insurer.

Previously, ART partnered with Nephila Capital to test blockchain in transacting a natural catastrophe swap.

Interestingly, we reported earlier on comments made by Mohamed El-Erian, chief economic advisor at Allianz, who said that Bitcoin lacks stability and can therefore be considered a commodity rather than a currency.