Reconcile claims and subrogation across insurers
Sector: Tertiary sector · Industry: Insurance · Organisation: RiskBlock Alliance (Konsortium unter Leitung der American Property Casualty Insurance Association, mit Partnern u. a. Marsh, Nationwide, The Hartford, Liberty Mutual, Aegon) · Maturity level: Pilot
The Institutes RiskBlock Alliance, a consortium including insurers such as Nationwide, Marsh, and Aegon, evaluates distributed ledger technology for property and casualty insurance. Using a shared Hyperledger Fabric architecture, member companies verify insurance policies and settle cross-carrier subrogation claims in an automated fashion. The initiative aims to lower operational friction and administration costs across multi-party insurance workflows.
Documentation status
- Project status: Pilot — The industry consortium tested various pilot applications such as a subrogation tool and coverage checks based on Hyperledger Fabric.
- Evidence: Evidence medium
- Editorial review: pending
Description
The RiskBlock Alliance, led by the industry organisation The Institutes, is building a shared infrastructure through which insurance companies can directly reconcile business transactions with each other. The use of permissioned networks makes intermediaries and lengthy bilateral correspondence unnecessary. Participating insurers can coordinate coverage confirmations and financial settlements in a trusted, tamper-proof environment.
Within the framework of the RiskBlock Alliance, insurance companies developed joint blockchain applications based on Hyperledger Fabric under the technical leadership of Accenture. One focus was on the subrogation process, where insurers settle and offset financial claims among themselves from regulated liability and comprehensive claims. Another focus was the digital proof of insurance coverage for quick and tamper-proof validity checks. By using smart contracts, settlement rules are uniformly coded and automatically executed as soon as both parties release the case data. The platform demonstrates how competitors can cooperate in non-differentiating processing processes to reduce the overall costs of industry operations.
Perspectives
B2B — organisations perspective
The system enables synchronous processing of subrogation claims and direct data exchange without central clearing houses between the participating insurance companies. Transactions and mutual settlement balances are recorded transparently and traceably in the consortium network.
B2C — consumers perspective
Policyholders indirectly benefit from shorter processing times in complex claims involving multiple parties. Digital proof of coverage also allows insurance confirmations to be immediately verified with third parties.
Employees perspective
Claims handlers no longer need to manually enter data multiple times or make telephone enquiries with other companies. The automated provision of verified case data reduces clarification efforts and avoids processing errors.
Benefits
General
- Standardised exchange of case data across company boundaries
- Minimisation of manual clarification steps and reduction of processing times
- Audit-proof logging of mutual transactions
B2B — organisations
- Automated settlement of mutual subrogation claims
- Reduction of clearing and transaction costs between insurers
B2C — consumers
- Faster resolution of settlements in cases of shared liability
Employees
- Less repetitive clarification effort in contacts with external insurers
- Focus on complex claims instead of manual document verification
Challenges
General
- High coordination requirements regarding uniform data standards among industry participants
- Legal and competition law hurdles in the joint operation of a data exchange platform
B2B — organisations
- Complex integration with proprietary legacy systems of individual member companies
Employees
- Transition from proven manual workflows to semi-automated approvals
Technology foundation
Permissioned distributed ledger technology based on Hyperledger Fabric enables selective, data protection-compliant information exchange between competing insurance companies without disclosing sensitive customer data.
Implementation examples
Consortium subrogation and proof platform
Competing insurance companies devote significant resources to lengthy bilateral correspondence and manual reconciliation of subrogation claims.
The industry consortium implemented tools for automated subrogation reconciliation and proof of insurance coverage based on Hyperledger Fabric.
Under the leadership of the educational organisation The Institutes and with support from leading insurers such as Nationwide, Marsh, The Hartford and Liberty Mutual, practical pilots were developed. The subrogation tool was intended to reconcile mutual claims between insurers via Smart Contracts. Additionally, the partners tested solutions for immediate coverage verification to speed up administrative processes and prevent double billing.
Inconsistent data sets between companies and manual reconciliation cycles lead to high administrative costs and delays in case closure.
Tags
Insurance, Consortium, Claims management, Hyperledger, Subrogation processing
Sources
- Nationwide Insurance Rolls Out Proof Of Insurance On The RiskBlock Blockchain
- RiskBlock Alliance™ Announces Plan to Launch Blockchain-Based Subrogation Tool
- Accenture Joins The Institutes RiskBlock™ Alliance as Lead Framework Architect to Expand Blockchain Use Within Insurance
- RiskBlock Alliance™ Announces Plan to Launch Blockchain-Based Subrogation Tool
- RiskBlock Alliance expands to 30 member companies