According to a new report produced by Aite Group, blockchain technology has been gaining significant momentum in the insurance industry since 2018. The number of insurance professionals familiar with blockchain technology has exploded in the past year and a half.
The idea behind blockchain technology has always been that it can benefit virtually all industries. Every sector would gain from a distributed ledger system which reduces costs and establishes trustless security by cutting out third parties. Although blockchain technology is often mentioned together with the financial sector, insurance companies have been paying close attention to the industry, as well.
A new report released by Aite Group titled”Blockchain in Insurance, 2019: A Market Overview” explores how prevalent all things blockchain has become in this sector.
Insurance Professionals Love Blockchain
The report compiled its information from a few sources, including 40 phone interviews with major insurance companies.
First and foremost, it looked at basic LinkedIn profiles from users claiming both expertise in both the insurance sector and technology. In assessing profiles, Aite Group found that only 96 profiles in this sector mentioned blockchain in April 2017; this number has ballooned to 29,335 in January of 2019. This explosive increase is paralleled by similar increases in cloud computing, machine learning, and artificial intelligence in the insurance industry.
The report also conducted 40 phone interviews with “blockchain experts, C-level executives, innovation directors, and thought leaders” at the leading insurance companies and their relevant consulting firms. The interviewers were done between October 2018 and January 2019. The report profiles 13 major vendors in this space including Black Insurance, Change Healthcare, Civic Technologies, IBM, TransUnion, and others.
What Insurers Gain from Using Blockchain
According to Aite Group, blockchain technology can benefit four major sectors of the insurance industry. These include:
- Customer information such as identity and private information
- Private capital which can be repackaged as tokens
- Applications and underwriting for brokers
- Processing independent claims
This makes sense. Using a blockchain-based system, the customer can know the status and policy instantly after purchasing it. The technology can easily streamline the entire insurance process.
Because the insurance sector is evolving rapidly, insurers need to find partners now or else they will be left behind. Senior Analyst Greg Donaldson at Aite Group recommends for insurers to “start looking for opportunities to test the waters with a limited use case or low-impact proof of concept” when it comes to the blockchain.
Insurance companies and blockchain technology are a natural fit for one another given the latter’s potential to significantly automate the former’s entire industry. It seems clear that insurers are trying to get a hold of this emerging technology in fear of getting left behind.
Does this report confirm the long-term viability of just blockchain technology or also cryptocurrencies? Do you think this increased interest in blockchain will eventually spill over into positive market sentiments? Let us know your thoughts in the comments below.