IBM: American Association of Insurance Services Resorts to Blockchain for Smoother Regulatory Reporting
For years now, one of the primary roles of insurance carriers has been to gather data. In between these carriers and the regulators is a link, popularly called the American Association of Insurance Services or simply AAIS. The role of AAIS in the whole arrangement has been to encrypt and aggregate a particular type of data before sending it from the carrier to the regulator.
Basically, it has been a trend for over 80 years, although the whole process is both cumbersome because of the massive data files involved and the huge time required. Even the digital revolution that helped digitalize the data hasn’t helped lessen the work involved.
One of the most pressing concerns regarding the whole procedure has always been the question of security.
This, alongside the data’s free access, accuracy and invulnerability from distortion as well as timeliness, has always affected the overall integrity of the data. And for those in AAIS, the risk has to be averted and rightly so for the best of the broader insurance industry.
IBM Garage Workshop Identifies Broken Processes
IBM Garage, in the wake of it, was called in to help AAIS develop the best solution. IBM is highly experienced in the insurance sector, and this, for the American Association of Insurance Services, is a perfect partner. The two, alongside the various carriers and regulators, finally staged a series of design-thinking workshops.
It was during the workshops that they discovered that the whole process of sending massive data files was the source of the problems. Basically, they found out that it wasn’t the data, but rather the mechanism that was susceptible to the risks.
Further, they analyzed the 80+-year-old trend, later realizing that the normal statistical reporting process it followed wasn’t as effective as it should.
For example, over the years, circumstances had forced regulators to ignore the AAIS and run directly to the regulators. Of course, this kind of arrangement had abused the long-followed procedure and harmed the overall wellness of the insurance sector.
The Best Solution: Developing an Open Blockchain Network
After all the workshops, the group finally had the best solution for the whole menace. Their resolve was to work with the IBM Garage and create a decentralized and impenetrable IBM Blockchain Platform based on Linux’s Hyperledger Fabric.
Hyperledger Fabric, according to IMB Garage, could effectively resolve all the data-sharing issues in the network, doing so after building an open Insurance Data Link on IBM Cloud. It would store data privately without getting tampered in any way whatsoever. Ideally, the technology would benefit everyone; carriers and regulators alike.
Those who would be granted access to the data in the open blockchain system will include insurance carriers, the regulators, AAIS and, of course, the IBM garage. For any of them to access the data, however, it will first have to seek permission, first by verifying their identity using the openIDL blockchain network.
Blockchain is the Real Revolution and They’re Looking into Recruiting More Companies
This technology is rapidly gaining traction, given its value-addition merits. With IDM Garage at the heart of the Open Blockchain Network, all the previous risks are wholly eliminated while adding value to the participants’ contributions.
This permission blockchain network will make it easy to increase the number of participants and still expand regulatory reporting beyond its original scope of carriers and regulators’ needs. Right now, the team behind its creation is mulling over the idea of adding new participants to encompass weather stations and the IoTs firms.