When cryptocurrencies crashed last year, the many I-told-you-so's tended to dismiss not only the currencies but also the underlying technology: blockchain. Not so fast.
As you'll see in this month's interview, with Patrick Schmid, president of the RiskStream Collaborative, blockchain keeps moving forward and is very close to entering production with at least a couple of applications than can make the industry operate more efficiently.
In particular, RiskStream's Rapid X, which lets insurers share information on auto accidents, is about to start a pilot that will use production data. Among other things, that pilot will let RiskStream generate real data about the savings in time and money that come when insurers can stop playing phone/email tag and can collaborate via blockchain on filling out the claims documentation.
RiskStream has also made great progress in an area where it didn't expect to find nearly so much interest: surety bonds. Working with five major industry groups, RiskStream has developed applications that greatly simplify all the document handling that goes into powers of attorney and into the delivery and verification of the bonds themselves.
The collaborative, which, like ITL, is an affiliate of The Institutes, continues to broaden adoption of its Mortality Monitor. The application allows network participants to share data on a deceased party with another network participant that also has the deceased as a policyholder. The goal is to speed the processing of benefits.
Progress on blockchain has been slower than I, at least, expected. I knew there would be technical issues and figured it would take time to line up industry support for a radically new technology. But I underestimated the extent of the chicken-and-egg problem -- you don't get the full benefits of a blockchain application until all the major players are on the network, but the major players aren't inclined to join the network until they see the potential for real benefits.
The good news is that RiskStream has pulled together support from just about all the major auto insurers and, while earlier in the process on surety bonds, has major backing there, too. And the history of what's known as network effects (or Metcalfe's Law) shows that when a technology reaches the tipping point, adoption comes very quickly.
So, no breakthrough for blockchain yet, but stay tuned. We're getting there.
P.S. In addition to the interview with Pat, you might want to read this piece in Risk & Insurance, a sister publication of ours, that provides a thorough survey of the blockchain landscape.