Many players in the insurance world have moved quickly to investigate ways to use the disruptive technology known as “blockchain” (or distributed ledger technology) to innovate and streamline insurance processes and the products themselves. The industry writ large is now getting a peek at those efforts as the first pilot blockchain insurance programs debut.
Of particular interest is the Codex1 insurance smart contract prototype debuted by insurance consortium B3i on September 10, 2017. Codex1 is a catastrophe reinsurance smart contract designed to automate many of the processes necessary for those transactions. The platform, which B3i expects to drive efficiency gains of up to 30 percent, is apparently close to production-ready, and is scheduled to be beta-tested in October 2017 and deployed in 2018.
And Codex1 is not alone. Danish shipping giant Maersk recently completed a 20-week trial of blockchain-based freight insurance with IBM Blockchain, EY, MS Amlin, XL Catlin, Willis Towers Watson, Microsoft, and ACORD Solutions Group. Indian insurer Bajaj Allianz General Insurance is using blockchain insurance products for travel and motor product lines. London-based technology company iXledger has partnered with Gen Re to develop life and health insurance solutions. PwC has developed a blockchain prototype for the London Market to improve claims bordereau management. The list goes on.
Given the industry-spanning buy-in, it is hard to avoid the conclusion that blockchain will soon alter the way the insurance world operates. The question is how—and what will it mean for the various players in the sector? As these blockchain insurance pilot programs debut, here are some key indicators to keep an eye on and what they are likely to mean for the industry.