The application of insurance in today’s transparent society is based on a chain of trust between clients and insurers. This is an age-old principle that applies to consumer insurance and protecting commercial entities and governments from natural catastrophes or specialty risks.
This bond of trust is founded upon an intangible “promise to pay,” and a unique combination of expertise, service quality, capital and security. This is based on disclosure of accurate personal data describing the insurable interests of the client, the agreement to a contract between two legal and consenting parties, and timely exchange of payment.
If there is a vulnerability in the transaction chain, particularly resulting from the increasing use of technology, then trust is severely weakened, diluting brand, eroding confdence and potentially losing business and shareholder value.
As society becomes increasingly digital and distribution channels more varied and complex, customers have higher expectations in choice of product or insurer. When certain aspects of the value chain become more commoditized, as a result, a customer bases a choice entirely on the availability of brand information and transparency of the insurer’s performance. The integrity, controls and transparency of insurers’ business processes, reinforced by recent trends in regulation, must be geared toward protecting the customer experience. Unless insurers are prepared to innovate, either customers or regulators will force them to change.
In this report, we discuss how innovation in the insurance marketplace (in particular the arrival of blockchain technology) may contribute to the future infrastructure the industry needs and how it can be applied to reinforce the chain of trust.
We identify the key attributes and opportunities that blockchain presents and examine insurance company readiness for digitization; How will the industry respond to its obligations to customers, markets and regulators and what key issues need to be considered?
As part of our discussion, we explore the role blockchain may play in a holistic innovation and risk management strategy, including concepts of cyber liability, big data and telematics.
Finally, we look at recent industry trends and advances that companies have made to enable change in the way they will transact business in the future
Blockchain technology as a platform for digitization