We have all heard that blockchain is poised to disrupt the insurance industry with the introduction of so-called ‘smart contracts’ – part of the appeal is that we can do away with paperwork by moving insurance policies and claims onto a secure yet transparent ledger, protected by digital encryption. But is the industry close to using the technology?
According to Richard Rattue, managing director of Compli-Serve SA, blockchain is not untested, but it does need to be refined for use by the insurance industry. “At this stage, it is still a bit of an unknown quantity for regulators, who are evaluating fintech projects with Treasury, but there is as yet no official timeline regarding the acceptance and implementation of blockchain – nor is there regulatory adoption,” he says.
There is little doubt that the insurance industry would benefit hugely from what blockchain brings to the table, however. “There are two bugbears in the insurance industry – trying to remain profitable, and combating fraud,” says Rattue. “The advantage of blockchain is that once your data has been validated and encrypted, it can’t be changed – once you’ve put your block in the chain, it can’t be amended. Blockchain can improve fraud detection and increase risk prevention, eliminating the common sources of fraud and miss-selling in the insurance industry.”
To read more about the future of blockchain and insurance, download the December/January issue of RISKAFRICA magazine.
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