AXA teams up with Shanghai’s GRE for blockchain insurance
PartnerGlobal Risk Exchange (GRE)
In View Summary
AXA Lab Asia and Global Risk Exchange (GRE) are developing a blockchain-based parametric insurance solution to equip agriculture producers to fight against extreme-weather risks.
The platform will use distributed ledger technology (DTL) to connect insurance providers and policyholders to a community of actuaries. Claims will then be triggered automatically via smart contracts during extreme weather conditions. The premiums stay on the ‘chain’ and provides a pool from which any claims can be immediately paid out and insurers can claim their premiums once the policy expires.
The business model caters to small premium products in the P&C space and helps insurers to service customers at an affordable rate. The service has been rolled out to farmers in Southeast Asia. The service can also be extended to car insurance companies.
How AXA’s Global Parametric insurance works
AXA plans to participate as both a primary insurer and a reinsurer on the platform to bolster its blockchain activities in addition to furthering its ambition to grow in the reinsurance space.
Frank Desvignes, Shanghai-based founder of AXA Lab Asia has said of this effort: “Blockchain platforms like GRE provide better protection to the underserved and lowers insurance costs.”
It appears Axa intends to use this platfrom to introduce agriculture risk products whilst assessing which other markets to target.
Benefits to Customers:
Transparency and privacy
Real-time processing of claims
Benefits to the Insurer:
Single version of information
Less auditing pains for regulatory compliance
Improved claims processing and settlements
Reduced operational costs
The Digital Insurer's View
Today insurance needs to be made available quickly owing to the changing nature of businesses and rapid advancements in the technology landscape.
Parametric insurance and blockchain is one of the most compelling use cases as demand for disaster insurance rises to unprecedented levels. With distributed ledgers, combined with an easily verifiable risk such as weather conditions, insurance claims can be placed and dispatched in real-time with ease.
Although the current blockchain use cases within insurance are early stage and confined to specific niches such as flight delay insurance and risk to property from extreme weather, the successful deployment of blockchain in these instances will catalyse the mass deployment of blockchain by insurers.