German insurance giant Allianz isn’t immune to modern fintech innovations; it too wants to take advantage of decentralized computing and streamline its vast operations, which span some 100 countries.
Dubbed Allianz Token, it is being tested to move money between the company’s global affiliates without having to deal with (fiat) currency conversions and other costs and inefficiencies.
A blockchain startup comes to help…
To make this possible, Alliant has teamed-up with blockchain startup Adjoint, which created a proprietary (private) blockchain for the project. More specifically, it was Allianz Global Corporate & Specialty (ACGS), the business-to-business part of the insurer, which led the initiative on the insurance giant’s behalf. The technology “part” was provided by Adjoint.
“Yes, we are thinking about a kind of Allianz token whereby money coming in will be converted to a token,” Oliver Volk, a blockchain expert at Allianz’s reinsurance unit and representative to the B3i insurance blockchain consortium, told CoinDesk. “But it’s a very big animal and we don’t know what kind of regulatory constraints there are.”
According to Volk, the token could help Allianz “get rid of FX constraints and other stuff we have to optimize, especially if you talk to certain currencies which we do not accept at our headquarters and have to be reconverted.”
He went on to add that from their point of view it doesn’t make much sense to over-rely on the banking system, as a virtual currency could bring along numerous savings on commissions.
The idea behind Allianz Token…
Alan Cabello, the innovation program manager for central and eastern Europe at Allianz AGCS, said the token idea cropped up from his previous prototype built for captives and retrocessions, which is the practice of one reinsurance company providing services to another.
“It’s essentially about the legal way of moving money from one side of the world to the other,” Cabello said. “Because of regulation and governance, etc., you need to move it from one entity to the next to the next – and that takes time.”
Beyond time, this is also a very labor intensive task, involving a lot of accounting, emails and other administrative work. What’s more, this is a sort of burden many multinational companies are facing a regular basis.
“Every single major industry and every major company has issues getting money from one side of the world to the other,” Cabello added.
In addition, with a virtual token Allianz and its clients get to know where the money is each step along the way.
Cabello, however, had to note that the Allianz Token has nothing to do with cryptocurrency. “It’s pegged to the dollar,” he explained.
Could Ripple do the job?
Before we praise Allianz for embracing modern technologies — they do deserve all the praise — we gotta wonder why they haven’t went for Ripple? From what we are reading this is the sort of technology Ripple was developed for, and which is already being tested by a few banks and other financial institutions all around the world.
Simply put, Ripple has proven its worth. Or we could be missing something? Don’t hesitate to drop your two cents in the comments form below…