According to a recent report, Hong Kong’s insurance firms are rapidly adopting technology that will enable them to keep pace with the rate of technological advancement in healthcare around the world, and their competitors.
Recently, a Hong Kong-based insurer said it has become the first insurer in the city to launch a blockchain-backed solution to speed up medical insurance claims and prevent fraud, adding that the distributed ledger technology will also help the company cut costs.
Its rivals have started selling insurance products and processing insurance claims online in the past year, but they are yet to adopt blockchain to process them.
Another property and casualty insurance firm, an online-only insurer listed in Hong Kong, uses blockchain to verify records and process claims. However, it offers this service only on the mainland.
Blockchain is a digital data structure that is most recognised for verifying and recording transactions using a network of computers rather than a centralised authority.
As the data and transactions are validated in real-time, the risk of fraud is eliminated and claims can be processed faster for the company’s 200,000 plus customers, according to the Managing Director the insurance firm at the launch of the company’s two products approved under the government’s recently launched Voluntary Health Insurance Scheme.
It was noted that the firm will also be able to save on its own costs because blockchain eliminates the need to reconcile medical claim data across various parties.
The Managing Director stated did not provide details on the actual cost savings through the use of blockchain, but said that the insurance firm has been investing 10-20 per cent of its annual expenditure on information technology as part of its focus on insurtech.
The company’s permission-based network is based on Hyperledger, the same technology behind the city’s blockchain trade finance network called eTrade Connect, which was launched in 2018 and backed by the Hong Kong Monetary Authority and 12 banks.
The Co-Founder a Hong Kong start-up that develops blockchain-based medical apps stated that insurance claimants and clinics in Blue Cross’s network can save a lot of time with the new service.
He noted that the efficiency and convenience of blockchain also mean that more doctors, Chinese medicine practitioners and chiropractors who do not employ a lot of support staff for administrative work, could be attracted to the aforementioned insurance firm’s doctor network.
The insurance firm is owned by the sixth-largest licensed bank in Hong Kong on total assets. The firm was originally a 50:50 joint venture between the bank and the world leader in the packaging sector, specialised in end-line solutions. The bank took control of the company after buying out its partner’s stake in 1999.
Group medical insurance was the main driver of its premium income growth in 2018, which grew 8.7 per cent year on year, according to information from Bank of East Asia’s annual report.
Another report on the topic noted that the Hong Kong-based insurance firm launched the blockchain-based solution with the objective of speeding up medical insurance claims, preventing fraud, and saving costs.
As part of its focus on insurtech (insurance technology), the firm has been investing 10-20 per cent of its annual expenditure on information technology.
According to the details, the blockchain solution launched by the firm is a permission-based network based on Hyperledger.
It is clear that the current environment in Hong Kong is conducive for innovation; particularly in healthcare. The launch of the insurance firm’s blockchain solutions signals the increasingly widespread adoption of tech and digital solutions for the betterment of society from a health perspective.
It is expected that a greater number of similar moves will be seen from other insurance firms and healthcare organisations.