AIG Australia CEO Noel Condon says blockchain technology could soon be used in the local market as the insurer explores opportunities following a successful international pilot.

Blockchain facilitates the handling of information between multiple parties by providing a shared view of policy data and documentation in real time.

The process can improve transparency and trust, reduce costs and speed information handling, according to AIG.

No one party can modify, delete or append a record without the knowledge of others.

“The insurance business is underpinned by utmost good faith and blockchain has to be a brilliant tool for that,” Mr Condon told insuranceNEWS.com.au. “It is potentially a very exciting development.”

Australia is often used as a pilot market for AIG innovations, and blockchain would likely be introduced in tripartite processes involving the insurer, a broker and client, he says.

AIG, IBM and Standard Chartered Bank this year completed a pilot involving a “smart contract” that linked parties in the UK, the US, Singapore and Kenya.

AIG Australasia Head of Multinational Ben Vale says the pilot focused on parts of the policy and payment process where there would typically be “pain points”.

“It was aimed at ensuring all the parties were on the same page with what actions have occurred and, just as importantly, what has not yet occurred and what needs to be addressed,” he told the Risk and Insurance Management Society Risk Forum in Sydney.

Mr Vale says the rise of the Internet of Things and the use of sensors also offers opportunities for insurers, particularly as use of the technology expands in areas such as industrial processes.

“The No.1 myth about the Internet of Things is that it only benefits consumers,” he said.