Blockchain could revolutionise China’s insurance sector, says former regulator

Adoption of the technology could lower auditing costs and fraud losses, leading to a stronger insurance industry

Blockchain could revolutionise China’s insurance sector, says former regulator

Insurance News

By Gabriel Olano

Wei Yingning, former vice chairman of China Insurance Regulatory Commission (CIRC), has said that blockchain technology could revolutionise the country’s insurance sector.
A guest speaker at the opening ceremony of the China Blockchain Application Research Centre held on Sunday in Shanghai, Wei said that blockchain is a promising technology that could deliver what the internet failed to.

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“In the modern insurance industry, the cost of auditing accounts for 30% or even 40% of the total. Even so, the ratio of insurance fraud in China is still not small. Therefore, the insurance industry is looking closely at blockchain technology,” he said. “In the case of insurance claims, a smart contract will be triggered to execute provisions, thus solving the problem of compensation settlement and lower auditing costs. Blockchain can reshape the integral foundations of insurance.”
Several insurance initiatives have been launched in China to increase adoption of blockchain technology. In 2016, Ping An Insurance, the country’s second-largest insurer with RMB4.7 trillion (US$682.9 billion) in assets, joined the R3 Consortium, which develops distributed ledger technology for the world’s financial markets.
The country’s life insurance sector grew by 55% in 2016, with premium income reaching RMB2.9 trillion (US$421.3 billion).

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