Blockchain insurance consortium B3i may have sparked renewed interest in blockchain applications in insurance with the release of its first product. This follows a couple of years of inactivity that saw excitement in the technology fade.
B3i is a collective of 40 leading insurers across the world. They have agreed to share ideas and information in order to find working solutions for blockchain in insurance – which to date have been thin on the ground. The group previously launched a prototype in 2017 that allowed apps to be tested on it, but progress has been quiet since then. There have been very few working examples of the technology within the insurance sector, which has seen hype around the technology die down and scepticism rise.
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The product is for property catastrophe excess of loss reinsurance. Its aim is to increase speed and cut costs by automating back-end processes and reducing admin. It also provides extra security, as only relevant parties are given access to the smart contract, which updates in real-time.
Many within the industry are yet to be convinced of blockchain’s worth. GlobalData’s Quarterly Emerging Technology Trends Survey (Q2 2019) found that only 39% of insurance professionals think that blockchain is important to their business. In addition, only 17% of respondents believe it is already disrupting the sector while 22% think it never will.
However, there have been a couple of working examples despite the technology being slow to take off. AXA owns a travel insurer called Fizzy, which uses blockchain to automate instant payouts when a customer’s flight is cancelled. Similarly, Aon partnered with Oxfam to launch a blockchain-based agricultural insurance scheme in Sri Lanka. The platform is used to send payments to farmers immediately once the water levels from rain hit a certain level. This highlights that blockchain can be an effective part of the insurance process, increasing convenience for consumers and efficiency for insurers.
The fact that all the leading insurers in the world are committed to the B3i initiative shows they have kept faith in blockchain. It is being tested in a niche product line at present, but the scale of companies invested in its progress means blockchain will be expanded to mainstream products if it proves it can boost efficiency.
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By GlobalData
