The open architecture integration model supported by regulators in China, Hong Kong and India, among others, in a push for open banking, has empowered bancassurers to seek new technologies, such as Blockchain and APIs, to further enter insurance according to leading data and Analytics Company.
Ever since bancassurance emerged for the first time in Europe in 1970, it has not developed consistently across different markets, this is due to several challenges such as regulations, failing to adapt to shifting customer expectation, complex operating and technology models of banks and insurers and eventually, most partnerships end up unravelling.
However bancassurance has enjoyed a growth spurt in Asia, thanks to the relaxation of regulations, macro-economic factors, increasing affluence and fuelling innovation. Towards the end of 2017, China Construction Bank (CCB) and AIA in Hong Kong announced blockchain-based solutions to streamline and improve their bancassurance processes and improve customer experience.
Expert says: “Blockchain appears to be the answer to past failures by providing fraction-free operations, transparency and security not only between the bank and customers but also with their insurance partners.”
“If anything, real-time data, knowledge sharing and customer analytics will increase partners’ understanding of customers, enabling more personalized offerings and faster services.”
For example, IBM Blockchain is selected CCB has to attain the above-mentioned benefits, leveraging Linux Hyper ledger fabric, which is designed to support the interaction of a range of multi-heterogamous components and systems among banks, insurers and other parties.
Beyond attaining operating efficiency and establishing trust, banks can grow their strategies by leveraging blockchain to ease the integration of InsurTechs for further portfolio innovation.
A prominent example of a first mover relative to InsurTechs is Deutsche Bank, which partnered with Friendsurance- – a digital broker – to complement their banking service, thereby offering customers a wide range of product and service choices.
Conclusion given by expert “However, this poses a potential threat, as banks began to bypass insurance incumbents for bancassurance innovation.”