Blockchain speeds up the claims process for Wuhan pneumonia? Understanding that Xianghubao in China is not insurance and its significance

According to the South China Morning Post, the Chinese online mutual aid platform Xianghubao (Mutual Treasure) utilizes blockchain to expedite the claims process and prevent fraud. The platform introduced a maximum of 100,000 RMB in mutual aid funds during the COVID-19 pandemic. In practice, the role played by blockchain in this product application is not very significant.

According to the South China Morning Post, the Chinese online mutual aid platform Xianghubao (Mutual Treasure) is using blockchain technology to expedite claims processing and prevent fraud. During the COVID-19 pandemic, this program introduced a maximum mutual aid fund of up to RMB 10 million. In practice, the role played by blockchain in this product is not very significant.

What is Xianghubao?

Xianghubao is not insurance but a mutual aid platform. There is no need to pay insurance premiums in advance; instead, expenses are shared by all participants when assistance is needed.

This program is available on the Alipay electronic payment platform and is derived from Ant Group, an affiliate of Alibaba. Ant Group's well-known products include Alipay, Sesame Credit, and Yu'e Bao.

According to Xianghubao's data, there are currently 104 million participants. If diagnosed with serious illnesses like cancer or rare diseases, after investigation and certification, individuals can receive a maximum of 300,000 "mutual aid funds" (approximately 1.29 million New Taiwan Dollars).

Payments are deducted directly by Alipay on the 14th and 28th of each month. For example, in February, there were a total of 2381 applicants sharing expenses with 99.4613 million participants, averaging 3.45 yuan per person. Deductions for this period will be made on the 14th.

Offline Verification, What Can Blockchain Do?

If a member falls ill, they can submit public hospital diagnosis information through the app. Different submission cases can also be seen within the app. However, how does it prevent fraudulent claims?

Xianghubao conducts offline investigations through a third-party investigative agency, which includes reviewing the applicant's medical records and treatment. The final decision on mutual aid is made by Xianghubao's audit team. Members whose claims are approved also have the right to raise objections to reject sharing the case. Interestingly, in cases where mutual aid is denied, users can initiate a claims review tribunal appeal, where all users act as a jury to vote on whether to approve the claim.

Xianghubao utilizes the Ant Blockchain established by Ant Group. In the program, you can see the text prompt "The case has been uploaded to the chain," indicating that the entire investigation process for individual cases is stored on the blockchain, and members can view the block information of the case. However, the app does not provide a blockchain browser link for members to further access information.

According to Ant Blockchain, its blockchain verification members (nodes) include courts, notary offices, judicial appraisal institutions, and other public trust organizations. In the case of Xianghubao, this data storage is primarily to demonstrate the function of "tamper-proof storage," providing users with a certain level of reassurance. Since Xianghubao's verification and payments are conducted within the same institution, there is no need for blockchain to increase trust between "cross-organizational" entities and expedite the claims process. However, if the blockchain certification can serve as medical evidence for other insurance companies in the case of patients having additional coverage, making the data credible and facilitating circulation, it can indeed accelerate the claims process for other insurance companies.

No COVID-19 Claims Cases Yet

As the COVID-19 outbreak continues in Wuhan, even though Xianghubao started covering confirmed cases from January 30, offering a maximum claim of RMB 100,000 (430,000 New Taiwan Dollars), and the full amount is paid by Xianghubao without sharing by users, there have been no cases displayed in the February applications. The official explanation states that investigations in certain areas have been temporarily suspended due to the endangerment of investigation personnel's safety, affecting the progress of investigations and reviews.

Taiwan Introduces Blockchain Insurance Platform, One Application Suffices

"Xianghubao" actually serves an educational purpose since most users are residents from third-tier cities or below in China, with an incomplete understanding of insurance concepts. Therefore, in the event of accidents, they may not be well-prepared. Compared to traditional insurance, "Xianghubao" has no threshold and is easy to understand, helping users transition from simple mutual aid products to more comprehensive traditional insurance coverage.

Taiwan has a comprehensive awareness of insurance, with a variety of policy types available. However, when accidents occur, if an individual has multiple insurance policies, separate evidence is still required, which can be cumbersome. The Life Insurance Association began testing the "Insurance Blockchain Alliance Technology Application Sharing Platform" in May 2019, collaborating with eight major life insurance companies to develop electronic policy wallets. This allows individuals to view multiple policies on the same platform and seamlessly link evidence data with insurance companies' claims systems, eliminating the need for multiple applications. This year, the Insurance Bureau and FSC are actively promoting electronic policy certification and storage mechanisms, as well as reviewing regulations related to insurance in e-commerce, aiming to overcome integration difficulties and slow legal progress in Taiwan.

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