In a world in search of more open, trusted and secure IT systems, all eyes are on blockchain. Through its distributed ledger, smart contracts and non-repudiation capabilities it acts as a shared infrastructure that can transform multiple processes across the insurance value chain. Here’s how.
Blockchain was highlighted in the 2016 World Economic Forum’s report on emerging technology trends as a potential “beating heart” of the global financial system. The report predicts that blockchain will account for 10% of global GDP by 2027.
Blockchain is a shared, distributed ledger with non-repudiation of transactions that can work in the absence of trust across a peer-to-peer network. In 2016 alone, over $1.4 billion was poured into blockchain technology globally across various domains, primarily through investments in numerous start-ups in the healthcare, finance and supply-chain sectors.
Where to start
Even insurers have left no stone unturned to explore blockchain’s potential for various solutions through technology start-ups (such as Teambrella,3 a highly disruptive person-to-person (P2P) model that enables groups of individuals to provide insurance coverage for themselves without the need of an intermediary, or a Helperbit,4,5 which specializes in microinsurance for humanitarian aid.
Blockchain has the potential to introduce new models, reinvent existing insurance processes and increase the capacity of insurance providers. To gear up for the coming blockchain age, we suggest insurers consider the following:
The key to success remains enterprise IT’s ability to pick, analyze and determine the right areas for technologies like blockchain to add considerable value. For more information, download the white paper Blockchain: A Potential Game-Changer for Life Insurance.