Blockchain innovation has greatly influenced many sectors. The coming of digital money as a means of transaction is also influencing the insurance industry. Many predict that it will further transform the industry. The question is “To what extent blockchain and insurance industry transformation are related?” “What aspect of Blockchain that will affect the insurance industry?”
The digital currency industry has a number of characteristics that may be relevant to insurance services. For instance, blockchain technology has a decentralized nature. This allows all participants to share data securely and directly to the target. On the other hand, insurance industry has a customer-centric system. It requires personalized serviced.
Relating Blockchain and Insurance Industry Transformation
The decentralized system in Blockchain is assumed to be relevant with the customer-centric nature of insurance. This is confirmed by Walid Al Saqqaf, the founder of InsureBlocks. He said that blockchain technology will play important roles in insurance business. The chance is even bigger when the technology is combined with machine learning, Artificial Intelligence (AI), and Internet of Things (IoT).
It seems that conventional insurance companies still try to maintain the status quo. On the other hand, insurance-tech entrepreneurs, including those who depend upon blockchain technology, try to ruin the status quo by means of distributed ledger system. Despite few products have emerged, the momentum is emerging.
A number of innovators have been actively reforming the insurance industry by using technology. They took different paths towards the efforts. This article will discusses few innovators and the paths they take to strengthen the relationship between blockchain and insurance industry transformation. Let’s start with B3i.
Blockchain and Insurance Industry Transformation: B3i
Standing for Blockchain Insurance Industry Initiative, B3i began as a consortium, which consisted of leading insurance companies. The company’s representative for North America – Susan Jospeh – notes that they are planning a powerful and safe blockchain-enabled system. They will begin with reinsurance sector and then proceed to commercial insurance.
The main objectives of the company include automating the inefficient and labor-intensive processes. To achieve the targets, B3i will build the infrastructures, products, and services required to facilitate the members. The company will launch the first product in the near future. The product will allow re-insurers to deal with businesses in a more efficient risk transfer.
Susan notes that B3i will use smart contract system to process claims on the blockchain. Smart contracts eliminate the need for additional contracts and exhaustive reconciliations. Then, the insurers will be able to improve the customer experience by reducing frictions while improving efficiency, data quality, and contract certainty.
They began with 15 major insurer and re insurer companies, which had ben working on smaller blockchain projects. Then, they invited other participants to join. B3i impressed the market with a number of advantages they offered for the markets. They include improved efficiency and better ability of face risks.
The insurers can take risks since they are covered by insurance. This allows them to work more efficiently in serving the customers. B3i is not alone. Other companies have taken a similar path with different strategies. Check them out in the next post.