Peer2Peer Insurance Global 2018 Study Shows Blockchain Is Disrupting The Industry
A study dubbed, “Peer2Peer Insurance Global 2018” revealed that blockchain technology has the potential to flourish the insurance industry. Investopedia defines peer-to-peer insurance model as a risk-sharing network of a group of individuals who put together their premiums to prevent risk from negatively impacting said investors. Such pooling typically consists of friends, family or those who share common interests, which will serve as the backbone against risk while increasing the benefits to everyone involved.
The study published by Research and Markets noted that policymakers will be given the responsibility of taking on several insurance-related roles, which include “policy rules, accepting new members, making and approving claims and paying reimbursements.”
Further analysis revealed that a “fine line” exists between the P2P Insurance model, traditional premiums and membership clubs that offer related insurance services. As for the blockchain aspect of things, the manual work done by insurance managers are done with the help of a blockchain and smart contracts. Such tasks include, “quotes, claims management and administration”.
The Need For Crypto Insurances
With some evidence that exist in regard to blockchain technology’s usefulness within the insurance industry, what about protection of crypto investors? The crypto market has seen multiple drops in prices in most of 2018, forcing many investors to seek insurance services that offer protection.
Some firms that are currently looking into blockchain and cryptocurrency insurance as a service includes Marsh & McLennan, XL Group, AIG, and Mitsui Sumitomo Insurance, as per Null TX.
Marsh & McLennan (M&M) is a global professional services firm based in NYC. Some of the services they currently offer include insurance brokerage, risk management and consultation. Apparently, M&M has been showing support for blockchain startups as well. This is a big deal given that it could lure in institutional investors and potentially promote user adoption.
XL Group, a global insurance and reinsurance firm that is hopeful of blockchain and cryptocurrencies. While they have yet to offer such services, the firm is currently investigating its potentials and assessing whether the risks outweigh the benefits.
American International Group (AIG) is another multinational finance and insurance firm that is understanding the like of blockchain and the potential services they can offer without bringing down investor confidence. Null TX noted that AIG, like the XL Group, has yet to offer a blockchain-based service, however, this is apparently normal given what’s at stake.
Finally, we have Japanese insurance firm, Mitsui Sumitomo Insurance (MSI), also referred to as a first mover within blockchain backed insurance. Unlike the firms mentioned above, MSI has already issued a bitcoin-backed insurance product. This does not come of surprise given the country’s friendly approach towards bitcoin and cryptocurrencies – considering its likes as legal.
What are your thoughts on the positive effects blockchain has on the insurance industry? Let us know in the comments below.