Case Study

Smart Insurance

Reply and CeTIF come together for the first parametric policies with automatic reimbursement based on blockchain technology and smart contracts.

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The solution

The "Smart Insurance" project has the objective of creating a digital system that makes policy management more efficient and facilitates the coordination of the various players in the chain, in particular insurers, brokers, distributors and policy holders.

In particular, the solution, built on top of the Hyperledger Fabric protocol, makes it possible to digitalize the end-to-end process of underwriting a parametric policy, automating the opening of any claim through the use of certified external data providers and providing an automatic process for claim settlement.

The ecosystem

Under the supervision of the Scientific Committee formed by IVASS, Istituto per la Vigilanza sulle Assicurazioni, CeTIF - Università Cattolica and Reply, the project involved four insurance companies (Mediolanum Assicurazioni, Cargeas, Nobis Filo Diretto and Reale Mutua) and three banking institutions (Banca Mediolanum, Banca Popolare di Sondrio and UBI Banca and Aon Benfield Italia S.p.A.).

During the trial, participants were able to test different types of parametric policies, intended as an insurance contract in which the parties had pre-established the criteria for determining the amount that the company would compensate the insured party when an event occurred. The claim is settled when the system has ascertained the deviation between a parameter provided by a certified third-party information source indicated in the contract and a pre-established value, automatically detected by the smart contract.

The three types of policies that can be tested on the platform belong to three groups: flight delay policies, weather policies and plant disease protection policies.

Benefits of the solution

The main benefits that were tested, trialled and confirmed during the pilot phase of the trial included:

  • Reduced underwriting time. Thanks to digitization, customer experience was improved: the minimum underwriting time was found to be only 6 minutes, which led to a high level of customer satisfaction with the platform and the products offered

  • Reduced operating costs. For insurance companies, it has been estimated that operating costs have been reduced by more than 60% when opening claims and settling claims compared to a similar traditional insurance product.

Next Steps

Based on the effectiveness of the trial and the positive evaluations of the participants, a pilot project is being launched to test this new product in a delimited perimeter in the field of plant diseases.