South Korea’s general insurance industry has established a blockchain consortium and is working on ‘blockchain-based projects’. It has formed blockchain infrastructure, which is the hottest topic within financial industries, to innovate tasks and to improve efficiency of such tasks.
According to related industries, General Insurance Association of Korea has formed a consortium with executives from 14 of its members out of 17 members who are responsible for blockchain departments for their respective companies. Samsung Fire & Marine Insurance deferred its decision while MG General Insurance and BNP Paribas Cardif cannot participate in this consortium due to circumstances.
Corresponding blockchain consortium will form a working group in this month, decide on additional projects by end of this year, and select appropriate businesses in 2019 at the earliest.
It has agreed to adjust speed on ‘joint-authentication on all financial industries’ because it is unclear whether blockchain-based join-authentication can replace certificates and customers will not feel any more different since most of log-in processes have been simplified. Moreover, effectiveness may be also low since it may take quite some time to adjust to entire financial industries. Technical approach will also be difficult since industries use different developers from each other.
As a result, general insurance industry is focusing on innovating tasks and centering its businesses on customers.
It announced that it will establish ‘coinsurance and reinsurance calculation and settlement’ as its main business and innovate tasks through this business.
Currently, calculation and settlement of coinsurance and reinsurance require many manual tasks due to omission of document reference numbers between members and other errors and there are delays in calculation and settlement as a result. Thereupon, loss of allowance for bad debts is significant due to long outstanding payments.
As a result, general insurance industry is going to apply blockchain technology to corresponding tasks to remove any inconsistent information between participating members and improve current calculation and settlement process by having members quickly confirm information on transactions mutually.
General insurance industry believes that allowance for bad debts will become lower and that insurance can be paid quickly to insurance contractors when blockchain technology is included in corresponding tasks.
Working group that will be established by end of this month will work on public tasks that will increase level of convenience and remove any inconvenience for South Korean citizens. Consortium has decided to create strategies that are centered on consumers since there are various types of insurance within general insurance.
“People who are responsible for development of joint-authentication (Chain ID) for financial investment industry and joint-authentication (Bank Sign) for banks also believe that establishing blockchain infrastructures just for joint-authentication has significantly low effectiveness.” said a representative for General Insurance Association of Korea. “We are hoping that more businesses will participate in our project by looking for additional projects.”
Staff Reporter Park, Yoonho | yuno@etnews.com