Blockchain: The P&C insurance industry’s potential game changer

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InsurTech firms are now coming up with innovative offerings based on blockchain technology.

From homes to vehicles, property and casualty insurers handle multiple types of policies. It’s no wonder the volume of customer data analyzed and shared within firms and among third-parties is increasing exponentially. The process involves a lot of data entry at multiple touchpoints and coordination between different parties, which makes the process time consuming and raises issues of data security.

Combining data from various sources and then seamlessly and securely sharing it with multiple stakeholders is a challenge for insurance firms. Blockchain technology, however, allows policyholders and insurers to digitally track and manage policies, and physical assets, and codify business rules and automate claims processing through smart contracts while providing a permanent audit trail.

Since multiple parties can update blockchain at the same time without altering the existing data, customer data captured from various sources can be accessed – seamlessly and securely – by multiple stakeholders.

Blockchain-enabled smart contracts can turn paper contracts into programmable code that helps automate claims processing and calculates liabilities for all players involved. A typical insurance contract is a paper agreement between two or more parties that is enforceable by law, but a smart contract lives on a blockchain and is enforceable by code.

The blockchain in insurance market size is estimated to grow at a CAGR of 84.9% to reach USD 1.4 billion by 2023.[1] According to the World Insurance Report (WIR) 2017, around 59% of executives surveyed said they were experimenting or will be investing in blockchain technology within next three years.[2] Moreover, a survey conducted for the WIR 2018 revealed that around 30% of surveyed insurers had either implemented solutions or created blockchain technology pilot programs.[3]

InsurTech firms are coming up with innovative offerings based on blockchain technology. For example, Slovenian-based startup InsurePal has developed a decentralized and self-regulating insurance platform based on social proofing. The platform leverages blockchain technology and peer-to-peer assessments to create a rewarding and transparent platform for insurance policies.[4]

Traditional insurance firms are developing in-house solutions or collaborating with consultants or InsurTech firms to formulate blockchain-based processes and new products. For instance, French multinational insurance firm AXA has introduced a flight-delay product that leverages blockchain-based smart contracts for automated claims processing.[5]

Similarly, a group of insurance firms and brokers (Generali Global Corporate & Commercial Italy, AIG Italy, UnipolSai, AON, and Willis Towers Watson) with support from Capgemini Italy, built a blockchain-based platform to improve simplification, transparency, safety, and efficiency in information-sharing processes between intermediaries and insurance firms.[6]

Insurers also are actively standardizing blockchain solutions via industry associations. Backed by major firms – including AIG, Allianz, Chubb, Liberty Mutual, Swiss Re, Tokyo Marine, and Zurich – the Blockchain Insurance Industry Initiative (B3i) explores potential blockchain applications in insurance.[7]

The 18-member Institutes RiskBlock Alliance has announced a blockchain framework to provide more streamlined and secure proof of insurance.[8] The Alliance is the risk management and insurance industry’s first enterprise-level blockchain consortium that brings together industry experts and developers to advance insurance-specific use cases via RiskBlock’s interoperable blockchain architecture.

While blockchain can increase back-end efficiency for insurers, it can also improve customers’ user experience. Blockchain-based smart contracts can auto initiate insurance claims for quicker claims processing, which means happier customers.

Organizations can seamlessly and securely share customer identities for better identity management. Automated processing can eliminate the exchange of thousands of emails and massive data files to mitigate errors. Furthermore, sharing customer data such as claims details within the organization or across organizations can enable insurers to detect and prevent multiple claims for a single incident.

Multiple parties can update blockchain at the same time without altering existing data. Therefore, several participants can seamlessly and securely access customer data captured from various sources.

Additionally, blockchain’s real-time data access can enable firms to provide on-demand products. For profitable and sustainable operations, on-demand business models require quick access to data, and microinsurance involves cost optimization. Blockchain can ensure data availability while reducing operational costs.

Key benefits of blockchain technology

Today, as huge volumes of data are generated for each customer by IoT and social media – and the need for real-time/near real-time data processing is increasing – blockchain can be a game changer by providing easy and controlled data access to insurers. P&C insurance is a compelling use-case for blockchain because it can transform the way physical assets are managed, tracked, and insured digitally.

Moreover, Capgemini’s Top 10 Technology Trends in Property and Casualty Insurance: 2018 discusses in detail the potential business benefits that insurers can realize by adopting blockchain technology. Most importantly, insurance companies can achieve improved cost efficiency, reduced risk, and a trimmed claims leakage by leveraging blockchain. With substantial benefits in offering, early adopters of this technology are likely to gain a definite competitive advantage.

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[1] Markets and Markets, “Blockchain In Insurance Market by Provider, Application (GRC Management, Death & Claims Management, Identity Management & Fraud Detection, Payments, and Smart Contracts), Organization Size (Large Enterprises and SMEs), and Region – Global Forecast to 2023,” July 2018,



[4] Crypto Coin News, “Presenting InsurePal – Distributed Blockchain Based Social Proof Insurance,” Sonny Axis, December 8, 2017,

[5] AXA website, “AXA goes blockchain with fizzy,” September 13, 2017,

[6] Generali Global Corporate & Commercial website, “GENERALI GLOBAL CORPORATE & COMMERCIAL ITALY Promote the Initiative to Optimize Corporate Risks Quotation, Negotion and Binding Processes Through Blockchain Technology,” January 10, 2018,

[7] B3i website, “The Blockchain Insurance Industry Initiative: by the market, for the market,”, accessed June 16, 2019

[8] Bitcoin Magazine, “Nationwide Insurance Rolls Out Proof of Insurance on the RiskBlock Blockchain,” Shawn Gordon, January 15, 2018,

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