Is Blockchain the missing piece of the puzzle?
DUBAI, March 12, 2017
In the wake of immense digitization, insurers are no strangers to disruption. Even today, the effect of Catastrophe bonds on the reinsurance market is felt to have unexpected consequences on direct insurers.
Constant innovation of business strategies has become vital in order to thrive and maintain a unique competitive edge, say experts.
A constantly growing and chronological digital ledger of all bitcoin transactions that have ever occurred, Blockchain has been known to be used extensively in the banking industry. Arguably called the greatest revolution since the dawn of the internet, it is vital to recognise the massive potential blockchain harbours in turning the tide in favour of the insurance landscape.
Blockchain builds on a set of four characteristics: decentralised validation, immutable storage, redundancy and encryption. Three prime avenues where effective implementation of blockchain can reap rewards for insurers include: increasing effectiveness in fraud detection and pricing, innovating insurance products and services and reducing administrative cost.
Interestingly, as of 2014-15, investments in blockchain-related start-ups across industries had escalated to more than $800 million (Mckinsey & Co., 2016).
Despite the fact that blockchain stands poised for exploration by insurers, unlocking its massive potential and harnessing it fully to drive efficiency is still a long way off. The core value of blockchain that is essentially extremely decentralised in nature, can only be realised with extensive collaboration by relevant parties like competitors, suppliers, etc. This gives rise to a host of technological, market and regulatory obstacles.
Another major challenge that blockchain faces is the fact that it is a substantial investment with a presumable five-year realisation timeline, making it logical to opt for alternative solutions that bring faster returns in areas that do not heavily depend on blockchain.
While blockchain may not bring immediate returns today, it is slated to underpin the sector’s growth in the future, say organisers of the inaugural InsurTech Integrated, a one-day dedicated event focused on the impact of disruptive technologies on the insurance industry.
The event will take place on April 12 at the Dusit Thani Hotel, Dubai.
The event, convened by leading financial intelligence platform Middle East Global Advisors, will gravitate around the theme of “Harnessing Disruptive Technologies to Thrive in a Digital Era”.
In light of the growing disruption in the insurance sector, InsurTech Integrated will pioneer discussions focused on how effective implementation of blockchain could be of strategic interest to insurers. Leading experts comprising Max Di Gregorio, partner, Digital & Technology Consulting Lead FS, PwC Middle East; Saqr Ereiqat, BlockChain Evangelist and Management Consultant; and Cecil O’Brien Owens, chairman and CEO, Total Technologies and Solutions (TTS) will discuss the key issues at hand extensively whilst offering valuable insights highlighting the opportunities and threats that come along with the technology.
The stream aims to highlight the importance of developing digital proficiency amongst insurance operators in the light of stiff competition by spearheading a series of insight-generating discussions. - TradeArabia News Service