In an effort to harness the potential of the blockchain technology, Marsh, a global leader in insurance broking and innovative risk management solutions, and a wholly owned subsidiary of Marsh & McLennan Companies MMC , has joined the Enterprise Ethereum Alliance (EEA).
EEA is the world’s largest open-source blockchain initiative with more than 400 members from a wide range of industries. Some of the big companies that are part of EEA are Mastercard Inc. MA , JPMorgan &Co. JPM , The Bank of New York Mellon Corporation BK among others. These companies expect that the blockchain technology will help them streamline some of their processes such as the clearing and settling of financial securities.
Marsh is the first insurance broker to join the EEA, and intends to work actively in the Insurance Working Group and Digital Identity Working Group, to further the adoption of blockchain applications.
The company’s shares have rallied 14.3% in the past year, underperforming 19.4% growth of the industry
Blockchain is the world’s leading software platform for digital assets. It was first developed as the technology platform maintaining the bitcoin transaction database – a shared ledger with real-time auto updates that can process and settle payments in minutes using computer algorithms, without the requirement for third-party verification.
Since then, the technology has gone mainstream with uses in an array of industries. For the global financial services industry, this technology has the potential to be disruptive. Promising a major paradigm shift, the blockchain technology can usher in cheaper and faster processes, with its ability to digitize transactions smoothly and efficiently.
Its importance cannot be undermined in the insurance industry. The insurers can use the technology through minimizing paperwork, better data handling, improved claims processing, quick fraud detection and prevention. While real results in the industry are yet to be seen given the infancy of this technology, expectations remain high.
Given the rapid adoption of the blockchain technology, we expect other companies from the insurance industry to join the EEA.
Marsh & McLennan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here .
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