For new entrants, blockchain will be at the core of their business model and operating model. For incumbents, it will be a "bolt-on."
This is the fourth in a series. You can find the first three parts here, here and here.
The Insurer of the Future
’s use of blockchain will depend on whether it is a new entrant or a traditional player.
For new entrants, blockchain will be at the core of both their business model and their operating model. The insurer will use blockchain to:
- Underpin a series of smart-contract-enabled parametric insurance products (if event X happens, and "oracle" Y confirms that, then pre-agreed sum of money Z is paid out automatically); and
- Maintain secure policy records significantly more cheaply than its legacy competitors.
If the Insurer of the Future
was a traditional player, it’s more likely to be using blockchain as a "bolt on," supporting new products that wouldn’t otherwise be cost-effective. The insurer might, for example, use blockchain ledgers to support micro-insurance policies. An example could be insuring jewelry just for the time its owner plans to wear it this evening. Or providing top-up insurance to participants in the gig economy, lasting just for the length of each gig.
See also: Blockchain: Basis for Tomorrow
But whether the Insurer of the Future
is a new entrant or an existing insurer, blockchain will be just one of a number of new tools at its disposal. This is one area in which new technology will be incremental to the industry rather than truly disruptive.
Unless you think otherwise?