One Revolutionary Idea For The Insurance Industry That Would Make Life Easier
Insurance is one the world’s largest and fastest growing business’s, and its collision with the Internet of Things could see some radical restructuring in the way we live
As the world’s newest insurance network (so new it’s still in production), Aigang has an insider’s perspective of what lies ahead.
Three revolutionary ideas underpin these changes. This article describes one; Augustus Staras, the CEO and co-founder of Aigang calls Autonomous Insurance. It is a result of converging technologies and ideas, currently playing out on the Ethereum blockchain and smart contracts, though the execution is not dependent on using that platform.
Autonomous, to put it simply, means it works by itself.
Take the example of a well understood Internet of Things device, a mobile phone. Aigang uses this example because they have already built a working prototype of that insurance product. The scenario and ideal goal is that you have a new phone with an insurance policy already installed when you power it up.
As you know, your phone already has diagnostic software that analyzes its operating state. Let’s say that a few months after the warranty expires, the phone detects that the battery is about to fail. But your insurance policy covers battery life for three years.
The insurance application interfaces with the diagnostic software, then alerts you to the issue and automatically sends you an insurance payout. If postal laws permitted, Aigang could even send you the battery!
No action is required on the part of the owner. The insurance can be low cost, because the insurer won’t need to pay insurance assessors to verify your claim — all relevant actions are triggered and executed by software.
Aigang uses the Ethereum blockchain and smart contracts. In that environment, the contract terms trigger payment transfers once agreed conditions are met. The insurer is a DAO, a Decentralized Autonomous Organization that lives on the Ethereum blockchain. Once built, it requires no operational management other than intervention in edge cases.
In the Ethereum Testnet, Aigang has deployed smart contracts that issue policies, conduct risk assessment and process claims. They have also deployed smart contracts that perform insurance profit calculations, create reserves and tokenise the insurance risk pool. The protocol architecture can successfully integrate other insurance products. They even have created a fully functioning DAO.
So which devices have the ability to host autonomous insurance?
There is no doubt that you are aware of the increasing number of devices connecting to the Internet. Once, just your phone and your computer. Now, your TV, your drone, your car, your boat, your gaming console, your fitness tracker, your hands-free speaker, reading devices, the list goes on, and so on. Even LG recently announced that all their new home appliances will feature WiFi connectivity.
Internet connectivity is becoming the default for new devices; what we know as the Internet of Things. All these devices, vehicles, appliances and systems are potentially insurable.
And 55 billion of them will be sold over the next eight years. That will change the insurance landscape.
Consider also that autonomous insurance is not limited to completely automated use cases, since Aigang’s protocols provide for aspects of a product’s insurance policy to be passed off to conventional reinsurers. In other words, some claims for your self-driving car might require manual oversight, some may be automatically dealt with. This enlarges the universe of products that can access autonomous insurance.
Autonomous insurance is the most efficient way of insuring a substantial percentage of the Internet of Things and Aigang is positioning itself as the major new player.
They will require additional resources to scale our business and meet that demand. The company has already raised 10% of its total target funding. Proof of concept is complete and a token sale is scheduled for November 15th. Funds will be applied to deploying their software outside the Etherium Testnet and integrating with specific IoT device software.
Once their funding is complete, and this insurance product is successfully tested and marketed, there is no doubt that it will change the way we take care of our internet based devices.