Does the insurance industry really need blockchain?

Entrepreneur Tim Lea, believes that blockchain has the potential to transform the insurance industry.

He says, “While insurance tends to be an industry that lags behind others in the adoption of new technologies,  blockchain has the power to change that completely, especially if used with other developing and emerging technologies.”

He predicts that smart contracts integrated with other technologies will become a powerful prospect for the insurance industry.

“By linking data from Internet of Things (IOT) objects, such as rooftop weather sensors or GPS devices on shipping containers, information can be automatically collected to verify adverse weather conditions, and to trigger an automated monetary payment.

“The technology could establish the “truth” that bad weather has occurred without needing a third-party assessor to validate the information.”

He also stated that blockchain technology could be used to establish the provenance of items, reducing the risk of fraud

For example, a London-based start-up has created a blockchain structure to look at the provenance of diamonds.

By looking at 45 pieces of metadata relating to a diamond, the unique identity and history of a diamond can be permanently established.

All the appropriate stakeholders, such as diamond merchants, retailers and insurers, have access to a single source of truth and can share data.

‘In principle, stolen diamonds can be identified, and the true ownership established immediately, based on each diamond’s unique design,’ he says.

Lea says that blockchain’s potential still remains largely untapped and warns, “It is like the dot-com era, but on steroids. Ignore it at your peril.”

Meet Tim Lea at the 2018 ANZIIF Insurtech Conference this May in Sydney.