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HK govt tech lab releases DLT insurance solution

The Smart Government Innovation Lab (the Lab) has announced that it is looking for start-ups, SMEs or other companies that are looking to acquire the updated version of a solution developed by one of its incubated firms in 2018.

Solution description

The solution was developed by MIDAS, is a motor insurance Distributed Ledger Technology (DLT) based authentication system which provides motor policy document authenticity checking service.

It is fully supported by the Insurance Authority, and currently used by related departments of the Government, insurance companies, sub-agents and intermediaries and car owners.

The system has been implemented and employed with a fully proven record by multiple departments, NGO and private companies since early 2018.

Application Areas

The areas of application for the technology include Broadcasting, City Management, Climate and Weather, Commerce and Industry, Development, Education, Employment and Labour, Environment, Finance, Food, Health, Housing, Infrastructure, Law and Security, Population, Recreation and Culture, Social Welfare, Transport as well as other DLT-related areas.

Technologies Used

The solution employs mainly blockchain technology.

Use case

The following are the current pain points in the motor insurance industry:

  • Car owners bought fake motor cover notes/policy documents which would not have any insurance coverage
  • No means for car owners to verify the authenticity of their motor cover notes/policy documents
  • Law enforcement body does not have sufficient time / effective means for facilitating their authenticity checking

The MIDAS motor insurance DLT-based authentication system aims to solve the above problems – with the following benefits:

  • Provides motor cover note/policy document authenticity checking service
  • The DLT system stores just-enough data for authenticity checking only
  • No Personal Identifiable Information (PII) is stored on the DLT system
  • The DLT system is a consortium platform which disallows any fake cover note/policy being uploaded to MIDAS
  • Transparency and immutability (data cannot be altered or deleted) provides an audit trail for all transactions on MIDAS

In 2018, a Hong Kong-based start-up and the Hong Kong Federation of Insurers (HKFI) launched the motor insurance platform that harnesses blockchain to ensure authenticity and counter fraud.

The system, known as the Motor Insurance DLT-based Authentication System (MIDAS), was developed to enable the easy verification of motor insurance documents to prevent fraud and spot fake documents produced by illegal insurance brokers.

MIDAS was developed over a 12-month period and has passed independent security audits. In order to protect the privacy of motorists, the ledger does not store any personally identifiable information.

Car owners can use a system-generated QR code to have their insurance cover notes and policies authenticated at the Transport Department’s offices.

The Chairman of the HKFI Accident Insurance Association stated that MIDAS is the first-ever industry-wide application of blockchain technology in the space of motor insurance in Asia.

This is a classic case of a public-private partnership initiative to address the perennial problem of fake cover notes in our insurance market.

Clamping down on insurance fraud

In a bid to reduce cases of insurance fraud, the Hong Kong Federation of Insurers (HKFI) launched an insurance fraud detection database to protect both insurers and policyholders in December 2018.

The Insurance Fraud Prevention Claims Database (IFPCD) will utilise state-of-the-art artificial intelligence (AI) technology to detect different types of insurance fraud, particularly those involving multiple claims and syndicates.

The IFPCD is fully compliant with the European Union’s General Data Protection Regulation (EU-GDPR), and its AI is powered by French insurtech company.

While Hong Kong lags behind many other insurance markets in terms of fraud detection and prevention, the aim is to move ahead quickly via MIDAS and the launch of the IFPCD.


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