New proof of concept projects in the insurance sector will get the green light.
2018 saw a shift to real use-case blockchain technology prototypes and proofs of concept projects in various sectors of the insurance market including: shipping, reinsurance and logistics. Most of the current viable projects are platform-based and use private or permissioned blockchain or similar distributed ledger technology. We consider this to be ‘blockchain-light' technology.
As this new blockchain-light based technology and systems become proven, revised and scaled (and in some cases proven not viable) and as the technology continues to mature, we envisage that these first movers will develop and rapidly expand this technology.
Current blockchain platforms tend to focus on the administration or back-office plumbing of relationships, where blockchain can offer real efficiency savings. Growth in the use of coded Smart Contracts, which automate all or part of a natural language contract, most straightforwardly via a platform relationship, are also likely to become more mainstream.
On a more ambitious scale, two developments offer a tantalising prospect of an eco-system in which a purer, decentralised vision can become viable: the focus on data sovereignty and attempts to ring-fence data ownership and control; and increased interoperability between different blockchain and disputed ledger technologies. We expect these will be the focus of new proof of concept projects in 2019, as they would allow new insurance risk to be considered and could improve the viability of existing lines of risk.
We also think that ‘Tokenisation’ – the recording of ownership of assets in digital form, which is quite distinct from crypto assets and currencies – will enter the mainstream. This will provide the ability to promote fractional ownership of assets, and to recognise small value sets, which offers a way to scale new projects.
During 2019 successful vanguard projects will spawn further development and more insurance sectors will start to adopt blockchain based technology, once they see the benefits these can systems deliver.
You can read the rest of our insurance predictions here.