Working with PwC, London Market Group is testing blockchain applications as part of its modernization program to improve claims processing at London’s largest insurance and reinsurance hub.
Client: London Market Group
Our Role: PwC designed and developed a “proof of concept” claims management application utilizing blockchain technology as part of London Market Group’s modernisation program.
Industry: Financial Services
Services: Technology, Blockchain
PwC is at the forefront of developing real-world applications for blockchain, the distributed, tamperproof ledgers that promise to cut out unnecessary intermediaries, reduce costs, and increase security for a variety of business transactions. Blockchain can also offer greater transparency and traceability for many business processes. But despite its many uses, blockchain is also a paradox: The technology is designed to foster trust, but companies may face doubts about its reliability and security. This is the challenge that both PwC and clients must address to realize blockchain’s potential and benefits.
London Market Group, which represents the insurance and reinsurance market in London, a global hub that covers close to $100 billion in risk annually, came to PwC for help in integrating blockchain technology as part of the its modernization program. PwC, working with London Markets, developed a blockchain “proof of concept” (POC) model to show how the technology could be used to eliminate pain points in claims management, a solution that has the potential to transform the market.
“Blockchain has the potential to improve the way insurers record risk, increasing the speed, accuracy and transparency of our processes. But we needed to test that it really delivers and PwC helped us do just that.”
PwC facilitated two design workshops with insurance brokers, claims experts and third-party administrators to identify where blockchain could simplify and improve specific claims management processes. One major pain point the team aimed to solve was reducing the lag-time in viewing transactions. The current systems only run for a period of time throughout the day, for example, between 9.00am-5.00pm, and outside that period there are some expected delays that could lead to complicated and expensive workarounds. There were also issues with version control, human errors (accidental or malicious), and the need to guarantee the integrity of information received from policy placement teams.
The first part of the project used a blockchain platform developed by PwC’s UK Blockchain lab, using Monax as the underlying Blockchain technology. PwC designed a series of development “sprints” to test putting a ‘claim on the chain’. After each sprint the team gathered feedback from all London Market stakeholders to ensure it delivered a minimal viable product (MVP). The second part of the project was to extend the claims management POC by integrating existing software. PwC worked with insurance software provider Guidewire to integrate Guidewire’s ClaimCenter management product into the blockchain platform.
The workshops led to a software POC in just six weeks. The team demonstrated the “claim on the chain” solution to 14 different firms within the London Market. Moreover, the project to integrate the claims management POC with Guidewire’s existing ClaimCenter product was successfully demonstrated at the Guidewire Connections conference 2017.
For both the London Market and Guidewire, the “claim on the chain” yielded significant results: The process worked 24-7, in real-time, and gave all parties transparency into the data and process. With no intermediaries there was no single point of failure, reconciliation errors were reduced, and they could validate claims data automatically. All this helped to build an immutable audit trail.
“This was a complicated project but well-suited to blockchain technology and we proved this concept. Blockchain can be commercially deployed to great effect.”
Global Blockchain Leader, PwC United Kingdom