A look into the insurance industry, and why they think they are the perfect home to explore the potential of blockchain and protecting consumers.
Annually, the Global Insurance Accelerator brings together a cohort of companies that are determined to disrupt the insurance industry. Iowa is home to more than 200 insurance companies and considered an international insurance hub. The cohort comes to a culmination annually at the international Global Insurance Symposium, a public-private partnership that brings thought leaders from all around the world to Des Moines for the sole purpose of building synergies between existing carriers, federal and state regulators, and innovators and startups. At the symposium, more than 650 people from nearly 20 countries gather in the heartland.
Chance McElhaney, Communications Director and Legislative Liaison for the Iowa Insurance Commission, is heavily involved in the work these up-and-coming companies are doing. He has seen first-hand how blockchain has gone from a conversation over the last several years to something that companies are incorporating their products.
“Technology that can boost trust, transparency, security, accountability. When you put all of those together—that’s what insurance does,” said McElhaney.
These variables are what makes insurance an industry to better explore the possibilities of blockchain. There are many different use cases going that are focusing on asset management, supply chain, and smart contracts.
Blockchain protects consumers
There are a few specific areas insurance companies are deeply exploring to better protect consumers. Specifically, ways to mitigate risks and fraudulent claims. Blockchain offers enhanced data for insurers and consumers and security and trust through transparency. In fact, “over $80 billion a year is lost to insurance fraud and that equates to $950/per family in premium, per year,” according to McElhaney. When there is an area where consumers can quickly see the dollars and cents savings from using the technology, the urgency and desire to adopt increases.
Although there were no teams that focused specifically on blockchain in the most recent cohort, one company Re-Sure—based out of Detroit—was part of the 2017 class. Re-sure is operating a blockchain-enabled, app-driven, smart insurance product designed for the on-demand economy.
Is the industry ready for blockchain?
Across the world, blockchain is still in it’s infancy, and the adoption rate hasn’t been taken up across the board—but the insurance industry is seeing is a lot of big players diving in. McElhaney explains, “blockhain is in dial-up stage—think about where that was to where we are now. There are now a lot of possibilities and smart people working to make things better for consumers.”
The Iowa Insurance Division is working to provide companies with a place to innovate, because ultimately innovation can help carriers, regulators, and most of all consumers. McElhaney believes Iowa is, “ahead of the curve in the conversation,” and states that “we want to be at the forefront, expect carriers to be at the forefront—but this isn’t a zero sum game. We can all grow and learn from this knowledge. This is all about benefiting consumers whether they are Iowans or not.”
Blockchain: Iowa’s crypto community is educational – April 4, 2018
Global Insurance Accelerator: Eight companies take the demo day stage – April 26, 2018