One of China’s largest insurance companies is seeking blockchain applications to reduce information asymmetries in the insurance industry. The People’s Insurance Company of China, the country’s largest issuer of casualty insurance and the world’s twentieth largest insurer according to Forbes, has partnered with VeChain to improve efficiency within the industry.
In a press release issued on Saturday, VeChain stated that the partnership was motivated by the “overwhelming paper trails” involved in managing insurance claims and policies. Because policyholders are rarely motivated to disclose all of their risk factors, insurers must go to great lengths to verify and audit their claimants, and those high costs are passed on to their clients.
Those costs multiply in the reinsurance industry, whereby insurers take policies on one another to distribute risk. The Reinsurance Group of America estimates that about 3-4 percent, or one out of every thirty claims, is fraudulent.
By adopting a blockchain for digital paperwork, PICC hopes to reduce turnaround and premiums while easing the procedures for claims and KYC. Moreover, the advent of Internet-of-Things smart devices and sensors may make it possible to issue “instant compensation” for a streamlined, faster insurance model.
“Collaborating with PICC expands our business within the insurance industry,” said Sunny Lu, Co-founder at VeChain. “We are confident we will provide great service and products to PICC.”
The partnership also includes DNV GL, a quality assurance and risk management company which partnered with VeChain last January. International exporters often rely on assurance companies like DNV GL to manage risk and complexity in their supply chains, and to ensure compliance with regulatory and industry standards.
“The role DNV GL plays is to ensure data integrity from the business operation perspective,” said George Kang, DNV GL’s CEO for the Greater China Region. “In conjunction with VeChainThor Platform, we will provide a robust digital trust platform to assist PICC with enhanced data management and efficient data processing.”
The announcement represents another coup from a project which has already collected high-profile partnerships like hot cakes. Through the VeChainThor public blockchain, the company is targeting areas like international shipping, insurance and quality control, where information asymmetry makes it difficult to verify the origin and provenance of sensitive goods.
For example,VeChainThor has found ready partners in the world of luxury fashion and liquor, where the the transparent blockchain can be used to protect both brands and their consumers from low-end knockoffs.
In China, where recent scandals have raised questions about the safety of vaccines and medicines, VeChain has been proposed as a transparent means of verifying that vaccines are safely transported and stored.
The VeChainThor blockchain launched earlier this summer.
The author has no investments in VeChain.