Blockchain is a technology that could transform security in financial services and could potentially reshape how complex transactions are dealt with. Blockchain is being used currently with numerous applications in insurance, medical data handling, document verification, increasing privacy & security, powering token economies and cross-border processing. Will Blockchain End Up Like 3DTV? is a good primer on blockchain – just ignore the article title.
Parametric insurance policies are rapidly growing and are an example of how blockchain technology can be used, though not all parametric insurance is powered by blockchain. Parametric insurance is when pre-agreed payment for a claim is guaranteed upon the occurrence of a triggering event, which needs to be a pre-defined parameter or metric related to the insured’s particular exposure. Parametric insurance is designed to close coverage gaps and not replace insurance. This is a prime example of technology being used for evolution in the insurance industry rather than disruption. To learn more, check out What is parametric insurance?
Here’s a successful trial use of Blockchain: The Proof (of Concept) is in the (Block)Chain.