Are Insurance Companies Able To Realize The Opportunities That Blockchain Can Bring On Data Security?
Understandings about data and the risks of ownership are changing, thanks to the growing popularity of technologies like blockchain and the Internet of Things (IoT). While the insurance industry’s interest in data collection and privacy is piquing, with some organizations participating in partnerships focused on exploring blockchain’s use cases, such as us here at Inmediate, there’s still plenty of room to realize the opportunities found in new technology focused on data.
In the insurance industry, we’re just beginning to understand how technology like blockchain could offer greater security protection for data, there are siloed organizations inside of insurance — even inside of companies, and there are silos of data as well — which creates an environment where it’s very taxing and tolling on a company to understand and to secure their data, but to also understand who’s using it.
There are also many insurance companies who are using outsourced third-party vendors who receive and manage their data, and oftentimes, it’s not the insurance organization’s security controls that are the most vulnerable, but those of the third-party vendors.
But things like blockchain, which would allow organizations to have more security around their own data and be able to only allow access for certain transactions under smart contracts, could really move them towards being able to break this cycle of really not understanding and being able to control the access and availability of the information.
The industry won’t just struggle with the emerging risk of how the mass of data coming from increased use of IoT devices will be secured. Insurance companies operate in a highly regulated environment, which can make it doubly difficult to implement new ways of handling and securing data collected from, for instance, wearable technology devices, into underwriting activities, while making it transparent to regulators whether this new technology didn’t lead to an unfair advantage or discriminatory practice.
It is also different than sending a file that contains all of the data to a third party, or to a regulator, to be able to examine. It’s a great deal that it is different to allow through smart contracts with some information to be exchanged without necessarily exposing the raw data in the process.
On a final note, we really have to examine — and now is a great time to do it, it’s the perfect opportunity — to start looking at how we actually can be collaborative and be more transparent so that in return, this will give us greater security in the future.