Blockchain is the future
The threat that Blockchain technology poses to the status of of the international insurance industry has been highlighted.
Matthew Morris, a director at Carr Consulting & Communications, argues that Blockchain technology also poses a threat to the status quo of the international insurance market.
Morris explains that as well as providing new solutions, blockchain also contains at its core the greatest threat in recent history to the status quo of the international insurance market, particularly in the developing world. The ‘Blockbuster video’ moment in insurance could be coming sooner than anyone predicts.
Why is there a threat? Because the whole idea of a blockchain is about removing the need for trust in a transaction.
This can be via a distributed and user-verified ledger of monetary transactions, as used by Bitcoin.
Recently, a more flexible type of blockchain known as Ethereum has been developed which allows for smart contracts. And it’s this innovation that means, theoretically, you no longer need an insurer to assess and pay an insurance contract.
As Morris says: “Blockchain can bring great benefits to the sector, but with that will also come great challenges. Insurers need to be cognisant of this threat if they are to have a hope of reacting to it in time.”