Allianz Global Corporate & Specialty (AGCS) has announced that it has successfully trialed blockchain technology for a global ‘captive’ insurance program including cash transfer between countries.

The prototype was developed by AGCS’s Allianz Risk Transfer (ART) in collaboration with EY, which served as blockchain advisory service provider, and digital agency Ginetta. In addition, Citi Treasury and Trade Solutions provided the payment processing services related to the prototype.

Captive insurance programs are established by multinational organizations that self-insure instead of purchasing insurance. The self-insurance programs or ‘captives’ pool together selected assets or insurance exposures from an organisation’s global operations, collect premiums from each of the operating companies and pay out claims internationally as they arise.

Blockchain technology automatically connects all parties involved in the captive insurance program – the captive management, local subsidiaries and the fronting insurer. It helps create a faster, transparent, secure and efficient means of information distribution, conducting business processing and recording transactions across multiple parties.

Built on the Blockchain framework Hyperledger Fabric 1.0, the prototype focuses on two types of insurance policies – Professional Indemnity and Property – for a captive insurance program with local subsidiaries in the US, China and Switzerland. The prototype looks at three common process flows in the captive insurance cycle – annual policy renewals, premium payments and claims submission and settlement– and translates these processes into the distributed ledger environment decreasing the time from start to policy, policy to premium and claim to settlement.

Allianz said that the results prove that blockchain technology can significantly improve the efficiency of corporate insurance transactions internationally.

“Our captive insurance blockchain prototype demonstrates that regular transactions and cash transfer between fronting insurers and clients can be significantly accelerated and simplified,” says Yann Krattiger, Principal at ART. “Automated processing replaces the exchange of thousands of emails and massive data files. Each process is transparent and can be tracked in real-time. Our customers benefit from increased speed, reliability and auditability.”