When I was in the International Blockchain Olympiad held in Hong Kong earlier this summer, I had the chance to talk to one of the executives at Manulife Insurance where he told me about the insurance claim fraud. Insurance companies would have to call other companies to check for claims made under the client's name. However, this is ineffective and it impedes on customer's privacy while increasing time and cost.
Insurance fraud affects not only the financial health of the insurers but also of innocent people seeking effective insurance coverage. Fraudulent claims are a serious financial burden on insurers and result in higher overall insurance costs.
Inspired by the ring signature concept, we leveraged cryptography and blockchain to create Ensurance.
What it does
Ensurance hashes information from an insurance claim and attempts to add it to the existing blockchain, which is available to everyone on a decentralized distributed ledger. It will check for all the existing claims on it, as a signature of the claim (not the claim itself) so that it protects the identity of the client and the insurance company. By comparing the hashes, they will give out a boolean output of true/false if the claim has already existed. So if it is true, then we have prevented a claim fraud. If false, then we can continue to provide the client with insurance service.
How we built it
The entire proof-of-concept application was built in Java using a makeshift blockchain that utilized SHA-256, an algorithm extremely resilient to hash collisions. Files were serialized and loaded from disk as .CSV files for clarity, with the insurance "claims" being digested into the blockchain's hash. Because only the hashes are stored in the blockchain, the original information cannot be derived, thus protecting the customers' personal information while maintaining a (mostly)-unique signature that cannot be forged.
Challenges we ran into
Researching prior knowledge to the blockchain and attempting to incorporate a different paradigm (ring signatures) proved to be a challenge as it assumed a lot of prior information to cryptography we were not privy to.
Accomplishments that we're proud of
We figured out blockchain as a whole and applying it using Java. We also searched for an industry problem that has an immediate impact if implemented.
What we learned
Blockchain is possible with Java. Decentralized ledger like blockchain allows an increase in integrity and verifying transactions such as insurance claims.
What's next for Ensurance
I want to launch this for insurance companies across Canada.