If it’s a new entrant, blockchain will be at the core of both its business model and its operating model. It will use blockchain to:
- Underpin a series of smart-contract enabled parametric insurance products (if event X happens, and ‘oracle’ Y confirms that, then pre-agreed sum of money Z is paid out automatically); and
- Maintain secure policy records significantly more cheaply than its legacy competitors.
If the Insurer of the Future was a traditional player, it’s more likely to be using blockchain as a ‘bolt on’, supporting new products that wouldn’t otherwise be cost effective. It might, for example, use blockchain ledgers to support micro-insurance policies. An example product could be insuring jewelry just for the time its owner plans to wear it this evening. Or providing top-up insurance to participants in the gig economy, lasting just for the length of each gig.
But whether the Insurer of the Future is a new entrant or an existing insurer, blockchain will be just one of a number of new tools at its disposal. This is one area in which new technology will be incremental to the industry rather than truly disruptive.
Unless you think otherwise?
Please see Part 5 – Customer Relationship Management and Marketing for further predictions.