February 4, 2020
Is Blockchain Ready to Hit the Market?
by Paul Carroll
Although I often remind people that ITL isn’t a news site, I’m going to make an exception here, because I want to be sure you saw the news about ITL that opens up major opportunities both for the website and for this Six Things newsletter.
And, yes, there is a connection to blockchain. Even if I’m indulging in some news, I still don’t believe in clickbait.
The news is that The Institutes has bought the Insurance Thought Leadership brand and publishing assets, including this newsletter. (Press release here.) As a result, I will have access to a slew of thought-leading resources, including a number of publishing properties and events that The Institutes has acquired in recent months and years. Among them: the International Insurance Society, run by my old friend and colleague Mike Morrissey; Risk & Insurance; CLM, which helped launch TI’s The Future of Risk conference last year; Claims Pages; and the Pacific Insurance Conference.
I’ll also be able to draw on the various repositories and generators of knowledge at The Institutes. That begins with the group that prepares all the educational materials that TI provides as part of the designations it grants but also includes the Insurance Research Council, the Griffith Foundation and the RiskStream Collaborative.
I’m the newest of the newbies, and the integration of ITL with the mother ship is in its early stages, but expect to see thoughts and thinkers from these other TI assets start to show up in what we do at ITL, and perhaps to even see some migration from ITL into these other venues as we all work to improve the state of play in insurance.
Which brings me to blockchain.
While I’ve seen great potential in the technology for years, I’ve been waiting to see it move beyond the theoretical and into the market, at least in significant tests. I haven’t exactly been surprised as concerns have surfaced, in particular about the speed with which transactions can be processed on a blockchain, a means of keeping encrypted public records that can be updated and accessed by relevant actors and, at least in theory, can’t be altered. Such concerns always seem to surface about technologies that promise such fundamental change—one of my favorite lines from Silicon Valley is, “Never confuse a clear view with a short distance.”
So, I was intrigued at a planning meeting two weeks ago when the leaders of RiskStream said that, after a long gestation, they are about to take to market a real, live test of blockchain. (Here is a white paper they prepared.) Of the four use cases, the two that struck me as having the most immediate promise relate to first notice of loss and proof of insurance for drivers.
With blockchain, insurers will be able to populate an encrypted public record with up-to-the-moment information on whose auto insurance is current. A decryption key to the record can be provided via an app to anyone with the right to see that information, in particular a police officer or motorist/insurer involved in an accident with the person providing the proof of insurance. Blockchain thus provides a way to tie together insurers’ disparate systems in real time, without potentially outdated paper cards, and should reduce the number of motorists who drive without insurance.
For first notice of loss, blockchain will provide a sort of spine to which the various aspects of the claims process can attach. To start, those elements will be the initial information gathering, including the conversations with those involved in an accident to gather their version of what happened. By creating a shared record for the insurers to access via decryption keys and then process via their own systems, RiskStream expects to reduce the number of calls between the companies, which can be numerous and time-consuming. Over time, RiskStream hopes to add elements to the blockchain, including dealings with collision-repair shops.
Don’t expect miracles. I certainly don’t. But at least blockchain and the market will start to meet each other. I’ll be fascinated to see what happens—and I’ll let you know what I learn.
P.S. I’m sorry to no longer be working on a daily basis with the great cast of characters (and I do mean characters) who did so much to help with the publishing side of ITL before the acquisition by The Institutes. Looking at you, Dave Dias, Wayne Allen, Paul Winston, Guy Fraker and Joe Estes. Many will continue on with the other part of ITL, now known as IE Advisory, which will continue to counsel on innovation best practices, drawing on its database of insurtechs and other companies whose technologies could affect the course of our industry. I wish you guys all the best, and I’m sure we’ll all see each other around the campfire.