InsurTech-Blockchain Briefing #4: ShieldIT (incl. Interview)
On 22nd November 2017 the Blockchain Summit took place in the Crypto Valley bringing together 600 attendees from all over the world. The Summit concluded with the awarding of the top prize in the Blockchain Competition to ShieldIT, the project of Hugo Moreau and Paul Nicolet, both master students at EPFL in Lausanne.
I had the chance to have a quick interview with Hugo about his idea and the next steps:
Could you please introduce yourself?
Hugo: Hello, my name is Hugo, I’m 23, I’m a Master student at EPFL. I come from Paris in France and am the co-founder of ShieldIT.
How did you become interested in Blockchain?
Hugo: In the last 5 years we’ve been flooded with information concerning the blockchain and cryptocurrency. We never had the opportunity to learn in depth how it works at EPFL. With my friend Paul we therefore decided to dedicate our Semester Project to the Blockchain. We yet had to find something to do around the technology but were sure that it was a very promising subject.
Later last year we also decided to invest in cryptocurrency because we realised that great things were going to happen in the field.
Why do you think Blockchain is important for the insurance industry?
Hugo: Insurance is one of the industry that suffers the most from asymmetric information problems. Fraud is caused massively due to the lack of trust among the different stakeholders. This is why we thought that leveraging such technology in order to build trust among users could truly revolutionise the sector.
What is ShieldIT about? How does it use Blockchain?
Hugo: ShieldIT is the project that resulted from our semester project. The idea is to create a Peer to Peer insurance where group of users can decide to contribute to a common fund of money in order to insure each other’s goods. It works on the principle of teams. A team represent a group of users that desire to insure the same type of good. To be a bit less abstract we can talk about users wanting to insure bicycles which value ranges between 400 and 700 CHF. The team will decide on the rules it want to follow when it comes to reimbursing claims. For instance they could decide that they wish to insure only bicycles that are locked with a U-lock rated 8/10 in terms of security. The smart contract (on the blockchain) will determine the amount of money that everyone needs to fund in order to be insured for an approximate period of one year. The important thing is that: when there is no more money users are not insured anymore. We do not provide an insurance, but a mean for you to insure yourselves.
Finally when someone gets its bike stolen then it can broadcast a claim on the network with all the details concerning the incident (for example picture of the bike lock, the receipt of the lock, a police declaration : whatever the community decided to ask for a claim). Users are then going to vote wether or not to reimburse the claimant. If the vote is positive the claimant get reimbursed automatically by the smart contract. Because we have succeeded to realign the interest of users with those of the insurer we can reduce drastically the number of frauds. Users are incentivised to make the fund last as long as possible but at the same time they cannot just bash each other by refusing claims all the time. When someone claims an incident other users can see how frequently did he vote against the community decision. So to conclude, there are no more central referee. The smart contract manages the money and takes actions in accordance with community’s decisions.
Finally when someone gets its bike stolen then it can broadcast a claim on the network with all the details concerning the incident .
How did you come up with the idea?
Hugo: In fact we started with another idea of project on the blockchain. We wished to create a mean for persons to share passwords with each other without revealing them (such as lending your Spotify account to someone for a party, such that the person cannot see it and such that it expires after a given period of time). After 2 weeks on the problem we realised that without dedicated hardware or a partnership with the platform to log onto we couldn’t do much and therefore decided to leave the idea. Then we brainstormed about what applications could benefit from decentralised trust. While notary actions seemed to be very promising we ended up thinking about shieldIT.
Then we brainstormed about what applications could benefit from decentralised trust.
What Blockchain-Technologies are you planning to use?
Hugo: So far we are using Solidity (Ethereum programming language). Nevertheless because of technical restriction we have yet to determine if this framework is the most fitted to our needs. This will be one of the first task to conduct: researching the most fitted platform.
What are your next steps?
Hugo: Indeed Paul and I have to finish our studies with a Master thesis. Paul is leaving to Singapore and I am going to Zurich for six months to finish this step. Once we will be done we plan on moving to Zug to start the startup at Crypto Valley labs. We have decided to give us a one year deadline (corresponding to the period we can pay ourselves a salary using the prize) to see whether we can solve the technical issues that we have so far and to determine if the market is interested in what we have to offer.