The Insurance Industry Will Make A Big Shift Towards Blockchain This 2019
We all know that in just a few weeks more, we all be wishing 2018 goodbye. And we also know that a new proof of concept projects in the insurance sector will get the green light this coming 2019.
In 2018 we all saw a shift to real use-case blockchain technology prototypes and proofs of concept projects in various sectors of the insurance market including shipping, reinsurance, and logistics. Most of the current viable projects are platform-based and use private or permissioned blockchain or similar distributed ledger technology. We consider this to be ‘blockchain-light’ technology.
As this new blockchain-light based technology and systems become proven, revised and scaled (and in some cases proven not viable) and as the technology continues to mature, we envisage that these first movers will develop and rapidly expand this technology.
Current blockchain platforms tend to focus on the administration or back-office plumbing of relationships, where blockchain can offer real efficiency savings. Growth in the use of coded Smart Contracts, which automate all or part of a natural language contract, most straightforwardly via a platform relationship, are also likely to become more mainstream.
On a more ambitious scale, two developments offer a tantalizing prospect of an eco-system in which a purer, decentralized vision can become viable: the focus on data sovereignty and attempts to ring-fence data ownership and control; and increased interoperability between different blockchain and disputed ledger technologies. We expect these will be the focus of new proof of concept projects in 2019, as they would allow new insurance risk to be considered and could improve the viability of existing lines of risk.
We also think that ‘Tokenisation’ — the recording of ownership of assets in digital form, which is quite distinct from crypto assets and currencies — will enter the mainstream. This will provide the ability to promote fractional ownership of assets and to recognize small value sets, which offers a way to scale new projects.
During 2019 there is a and assurance that successful startup projects will spawn further development and more insurance sectors will start to adopt blockchain based technology, once they see the benefits of these new systems can deliver. We are all hoping for the best this coming year, that many of our insurers will continue to provide an effort of continuous change thru adopting the blockchain technology in further enhancing the services and quality of the insurance industry as a whole.