How do insurers feel about blockchain technology?

Are insurers holding back from blockchain?

According to Marek Kaszczyc, Vice President & Head of Poland operations at Xceedance, DLT (Distributed Ledger Technology) is the ‘next big thing’ across various industries.

DLT exists to remove the need for certain intermediaries in everyday business transactions, to increase the speed and reduce costs for both regulators and the industry. The DLT can provide many benefits for regulated markets, particularly in sectors where multiple participants need to share data.

Despite the promising aspects of DLT, there are some concerns behind the technology. Marek Kaszczyc, believes a likely cause to the doubtfulness over blockchain is due to the relationship it has with Bitcoin, and its definition as the foundation of cryptocurrency.

Some common critics of blockchain & cryptocurrency:

  1. People are uncomfortable with the idea that there are so many attack vectors that are theoretically plausible today. An attacker will always be able to do damage in any system.
  2. According to Steve Wilson, blockchain creates consensus about the order of entries in the ledger. However, it does not and cannot reach consensus about anything else.
  3. According to Forbes, blockchain is too complicated - The technology behind blockchain is complex enough. “Add it to the complexity of a heavily regulated business environment, and blockchain may not even get out of the gate.”
  4. Just over a month ago, JP Morgan Chase, CEO, Jamie Dimon, claims bitcoin is a ‘fraud’. Read here.

Having said that, the benefit of blockchain holds more weight in comparison to these critics. It is assumed that blockchain will have a visible effect on the insurance industry within the next five years. A McKinsey & Company report, published in March 2017, states 22% of the total use-cases have come from the insurance industry.

In relevance to iXledger, we are utilising blockchain technology and smart contracts to enable buyers and sellers of insurance to transact business in a highly efficient and secure manner, with easy access to valuable market insight and data. iXledger aim to offer brokers and insurers an end-to-end solution that’s faster and more intuitive. Our platform will also downstream processes related to policies, premiums and claims. Click here for our product video.

What do you think? Will insurers favour blockchain technology in the future? Join the discussion.

Article originally posted by Intelligent Insurer, 23/10/2017