The insurance industry and blockchain tech


#1

Do you think that the insurance industry could be disrupted by scalable blockchain technology? Have a look at this: https://blog.aeternity.com/the-digital-insurance-marketplace-7e4c3976a81a

Comment?


#2

Here are some User Stories I wrote focused around blockchain and insurance

1.Environment
Robert is an environmental enthusiast living in California. He followed the debate, lasting some years, about drought in and around the area he has grown up and also is currently living in.
One day he is challenged by friend, declaring that caring and knowing about the state of our environment is not useful to anyone except when acted upon.
Seeing a truth in what his friend told him but not owning any professional faculty in the field, he feels stuck.
Today he came across aeternity and realized what this meant for him. He goes on and creates an ‘Oracle’, asking people in his social media channels to make predictions for the following question:
"Wildfires in California will burn down (x)m2 of forest area during June and October 2017"
The more sure they are about the outcome, the more they should invest in their believe.
The stronger the Believe, the bigger the invested amount, and the higher the amount of stakes bought, the more likely it is that this answer is correct.
Discussion in his social media channels are running wild, also many are wondering about why people shouldn’t give false predictions to corrupt the result?
Investing in stakes cost money, so unless a person would like to destroy lots of his money to bet against a market, it is advised to only buy stakes if one is sure of the outcome either through expert or insider knowledge about the events in question.
This creates a prediction market that can be leveraged by insurances, governments, companies, activists and more.
If Robert turns out to be right, he and everyone else will be returned their investment with a profit.
Additionally Robert can now use his knowledge and the power of prediction markets to make changes on the basis of secure and decentralized predictions. For example proposing stricter environmental laws to his local government, in order to mitigate natural occurring catastrophes.

2.Insurance Broker
Andrew is a successful insurance broker. Reading up on the latest technological breakthroughs and inventions he is very much aware how automated protocols are taking over the insurance sector and ultimately his workplace.
Ben, a good friend of Andrew, is self employed since he discovered a digital insurance marketplace where he can go about his insurance broker business freely, interacting peer to peer with the soon to be insured.
His day to day work consist of implementing data from prediction markets and using smart contracts to orchestrate a digital ‘bond of trust’ package. Once created, it’s displayed in the front end of the ‘Digital Insurance Marketplace’.
Any one in need of insurance and with access to the network/platform can buy insurances with custom parameters at dynamic rates and each with custom
parameters. The rates and parameters are based on the odds and complexity of the prediction markets that feed into specific parts of the ‘bond of trust’, as designed by the ‘digital broker’.

4.Small Businesses
Catering/Diner/PopUp Stores: On-Demand Insurance whenever.wherever.
Laura is a virtuous chef and created an authentic streetfood concept. But rent in Berlin is expensive so she decides to try out her concept in a store that offers her a small area to sell her product.
But what if someone chokes on her food, or injures her/himself on her equipment, most likely neither the shop nor her personal insurance will cover.
Signing an annual insurance is also out of the question, because if she is doing it again it will be another location and a date is also not set.
She feels herself thinking what if there was an insurance that I could activate on demand from any store location, pay an hourly or daily fee and can be canceled instantly.
Yesterday evening, she met Andrew in a Bar, who told her about this new platform where anyone with an account can buy insurance on an hourly basis on the spot for almost anything. A ‘Digital Insurance Marketplace’.
Back in the store she downloads the App, creates an account & deposits funds. She breezes through the interface and lays her eyes on the ‘Pop Up Store Allround Package’. It contains a complete P&C coverage (total insured amount of $US 500k), for as long as the package is active. She gladly accepts for a 24 hour period and gets a discount price of US$ 4/h, totaling at US$ 96. After 42 minutes a service employee, from a company that focuses on Property & Casualty Insurance on the blockchain, arrives at the store and installs a small device required to gather accurate data for the insurance plan.
Lauras PopUp Store is a full-fledged success, not only but maybe partly because she didn’t had to worry about paying for any accidents that could have happened.

5. Privat/leisure insurance

Night.out.Insurance
Anna is having a ladies night out and just got a new iphone. She decided against the annual insurance in the store, since she did not have enough money.
However thinking about how her last phone died, she regrets not signing the insurance when she bought the phone. With a digital insurance marketplace, she can go online and activate a full insurance cover plan for her ihpone for just this one night and only if a drink is spilled or she drops the phone. This will cost her 2$ an hour, whereas an annual care plan from apple would have not protected her against those accidents and have cost 40$.

  • insure your iphone/documents/valuables before you are having a night out
  • if you don’t claim, you get money back
  • if you claim, next rate will be higher
  • possible integration of health wearables to incorporate health stats about when and how drunk / intoxicated person is
  • possbile to feed anonymous data into Oracles for PMs

6.Sharing Economy
6a Uber

  • Uber Taxi driver registers with “Blockchain Car Insurance Company”
  • Status and set up of car is verified against Taxi standards, approved and green lighted for traffic; not approved not able to sign in
  • the less problems the lower the rate gets, the more problems the more the rate rises
  • Taxi can deactivate if car is not used as Uber Car (possible to share Uber cars!) -> this creates PMs:
  1. How often do Uber Drivers crash? have unsatisfied customers?
  2. How often does one specific Uber Drivers crash or have unsatisfied customers?

[Inspired by Forbes Article on Sharing Economy](https://www.forbes.com/sites/kathleenkusek/2014/07/15/the-sharing-economy- goes-five-star/#1da6a9495f3c)

6b BikeRental/CarRental
Bike/Car can now be properly shared by peers, no authority needed to cover for insurance. Insurance is applied to driver the second he registers the car and the instant he loggs out.
Groups of People can collectively buy a car/bike/house and share the insurance ‘bond of trust’ that is tailored to their demand and time frame of usage

6c Goods/Services
Someone needs a high-end item like a camera, bicycle or golf clubs, but only for one-time use. The interested party registers on sites like Zilok or Neighborgoods, enters into a contract and pays a fee to reserve the item of choice. Lender and borrower meet at a safe spot where they complete the transaction.
Usually a trusted party is needed. With Blockchain no trusted party is needed. cutting costs to a minimum. Transactions done via blockchain and data points used in custom insurance.


#3

I give it less than five years to the insurance industry to have blockchain tech as a standard.
I could even bet it.


#4

These are indeed splendid examples. It speaks volumes about how blockchain could help organize a company and make the campany transparent but encrypted.
This is a potential solution to fraud and duplication.
Blockchain is capable of building a non-centralized peer to peer network where everyone is connected and is allowed to access the transactions happening over the internet.
The first huge success was the bitcoin obviously and I feel there will be many more like those to come.