How Blockchain Will Change Insurance for Good

Do you want to know how to disrupt a long-established industry? Believe me, it is simpler than you think.

Of course, you’ll need a genuinely innovative and revolutionary technology by your side. R3, the enterprise blockchain platform, is already winning big in the blockchain insurance sector, with a head-start over other DLT providers.

Achieving privacy in a system forked from public networks

For most insurance firms considering blockchain, maintaining privacy in a system forked from public networks was the deal-breaker. However, there are far more significant benefits to creating a public blockchain insurance system than there are concerns over the privacy, or lack thereof, of the system. Blockchain insurance networks are able to use a proof of insurance scheme, whose primary goal is to weed out the uninsured, especially motorists.

In addition to that, these insurance platforms hosted on the blockchain will provide efficient data sharing means. Hence, the time is taken to notify an insurer when a policy-holder is filling a claim reduces. Furthermore, with regards to subrogation, the pursuit of the other party in an accident will change for good. Besides, insurance compensation will also change, emphasizing blockchain-based net settlements. Also, parametric insurance, which pays claims automatically, might use smart contracts for fast and precision payments.

But, this is all theory. What about a timeline?

As is stands, everything is already in progress now. Specifically, before the end of this year, the first Proof of Insurance, and Notice of loss will be filed.

Validating blockchain insurance projects

Have you heard of the RiskBlock Alliance? In detail, this is a consortium of insurance companies such as Marsh, Chubb, and Liberty Mutual. Specifically, this is a combined effort to explore the application of R3’s Corda platform in the insurance sector.

On the other hand, B3i, a European reinsurance consortium, alongside R3, account for all significant blockchain insurance consortia. In fact, both are Corda users as B3i recently switched to Corda from Hyperledger fabric. The Insurwave marine insurance platform, which is a joint venture by EY and Maersk, is working on a similar platform.

However, leading the race to create the ideal decentralized insurance platform is RiskBlock, which officially launched in mid-2017. The Institutes, which is an insurance research and education network, is behind the RiskBlock project. This consortium has spent the last two years testing enterprise blockchain solutions. After narrowing down their list of solutions to Quorum (by J.P. Morgan Chase), Hyperledger Fabric, Corda, and Digital Asset, the team settled for R3’s Corda.

In essence, the race to the best application of blockchain for the insurance market is attracting many insurance heavyweights. Hence, with this surplus of funds for research and development, disruption of the insurance sector might be around the corner.

Last modified: October 16, 2019