In 2017, we will see the first real applications of blockchain technology in action - in specialty P&C and in health insurance.
Blockchain, or distributed ledger technology, has quickly become a fixation in the financial services industry as a result of its potential to revolutionize our thinking about data sharing and security.
In considering the technology, senior business and IT leaders at property and casualty (P&C) companies must balance their natural skepticism about “next big thing” trends with a clear recognition of both the large-scale impacts and significant upside.
See also: What Blockchain Means for Insurance
After all, it’s not hype to say that the opportunity is huge and that the possibilities of future applications are many. Similarly, it’s not hard to see how distributed, secure, peer-to-peer ledgers — the mysterious and exotic-sounding technology behind blockchain — may one day be as common in the insurance industry as Structured Query Language (SQL) databases. Blockchain has the potential to evolve into a core, underlying element in the technology “stacks” of most P&C carriers, supporting a diverse range of processes and part of your company’s future technology “plumbing.”
P&C executives must also keep in mind that these are still very early days. Blockchain in 2016 is roughly where the World Wide Web was in 1996 — on the radar of forward-thinking companies but still a long way from adoption at scale. Therefore, the question for most P&C companies is not whether they will adopt blockchain, but rather what and how to start testing, develop proof of concepts and proving out the value proposition.
In 2016, we saw numerous announcements of intent, but to date we've not seen many (any?) true applications of blockchain propositions live in the insurance market. In 2017, we will see the reality - in specialty P&C and in health insurance. This will lead to a fundamental rethinking of insurance business models.
See also: Blockchain: What Role in Insurance?
In our new report
, we look at emerging blockchain applications and the five main areas where we see the potential for transformation/disruption in the insurance industry.