Reliance General Insurance

Part of the Reliance Group, Reliance General Insurance is one of India’s leading insurance providers and has been at the forefront of exploring the application of blockchain in the insurance industry.

The company is using blockchain technology in its claims management processes both to automate handling and to tackle fraud. Validation is one of blockchain’s strongest suits - any kind of transaction is only approved by consensus, and once approved, transaction records cannot be altered.

In practice, RGI uses this to guard against multiple claims for the same incident - once a first claim is processed, it is impossible for another one to succeed, as the record of the first will prevent any other being verified. Blockchain also gives the company a highly reliable historical record of claims details, which can be used to identify patterns of fraud.

In terms of automating claims handling, RGI makes use of so-called smart contracts. Smart contracts are agreements between two parties registered on the distributed ledger. In the same way that the ledger can be used to authorise and trigger payments, smart contracts use the technology to trigger agreed actions when certain conditions are met. So in the case of an insurance policy, claims, payments and reimbursements can be automated as soon as certain conditions of verification are met, such as a police report being filed for a traffic accident or incident of theft, or a physician’s statement supporting a medical claim.

RGI has used this approach to offer a flight insurance product on the Ethereum blockchain which automatically pays out when cancellations or delays are reported from airline and airport authority data sources. This both provides the customer with a more convenient experience, as they do not need to present evidence for a claim, and cuts labour and costs for the provider.

Vivek Zakarde, Head of Data Warehouse, Business Intelligence & Analytics at RGI, said: “While blockchain might not be the end-all-be-all to problems faced by insurers, it does provide foundational technology that promotes trust, transparency and stability.

“Blockchain promises cost savings so dramatic, it will disrupt many lines of business and core functions, including assets liability management, regulatory compliance, cross-product processing, and trade execution. Distributed ledger technology could reduce financial services infrastructure cost between US$15 billion and $20 billion per annum by 2022, providing the possibility to decommission legacy systems and infrastructure and significantly reduce IT costs.”