The insurance industry has no policy to cover its investments in blockchain — those costs are sunk, so this is a make-or-break year to see if they will pay off.
The industry has invested heavily in blockchain technology. Many believe insurers are trending toward the results stage — less investment in blockchain, more focus on evaluating what they have. That trend will result in more thoughtful, finished products hitting the market.
The industry’s demands for these platforms are clear: faster processing, less friction.
Some believe R&D investment could temporarily halt while these solutions are tested at market. Evaluation will give way to the next round of investments in time.
The industry wants to know how its stake in blockchain will pay off. The success of the earliest adopters will shape industry attitudes towards blockchain going forward.
1. Christopher McDaniel, President of RiskStream Collaborative
“The number one trend will be the adoption of standardized blockchain frameworks and a move to real production. Return on investment (ROI) will have to be measurable and real.”
2. Avesta Hojjati, Head of R&D at DigiCert
“Flexibility [is a trend], especially considering policy seems to be the main driver for shaping the blockchain platforms designed and developed for insurance. Given that the policy for insurance is different and very region specific, the chosen platform(s) requires flexibility to adopt new requirements while keeping the security bar high.”
3. Edgar Fernandez, Co-Founder of EOS Costa Rica
“Recent developments like upgradeable contracts and new token standards like ERC 721 and ERC 1155 will converge into real business applications. In short, contracts that are tailor-made to fill an insurance need later can become the standard.”
4. Ryan Brubaker, CIO at Seven Corners Inc
“There will be a dip in research and development (R&D) dollars spent on blockchain in the next year. It will return to full force in a few years, but the initial hype of blockchain has worn off and companies are realizing that it is very early. The largest companies will continue to invest, but smaller companies will hold back now and wait for more standards to develop.”
5. Dr Mervyn Maistry, Founder and CEO of Konfidio
“The most important 2019 event every insurance actor is looking forward to is the release of B3i’s risk transfer solution. The multinational consortium is working with Corda to develop a smart contract layer allowing insurers and reinsurers to exchange risks in a more efficient and frictionless fashion. The expectations for this project are high, especially as it involves 15 of the most important insurance actors.”
6. Thiru Sivasubramanian, VP of Architecture & Technology Strategy at SE2
“From a technology perspective, the number one trend and challenge that will shape blockchain in 2019 is the performance of the underlying technology. If a consumer, for instance, goes to a carrier’s website to transfer funds or make changes to policies, the web transaction is almost instantaneous. A similar transaction recorded in blockchain is pretty performance heavy because changes have to be made to several blocks in the network. There has been progress on the technology side to reduce transaction time, but this is being closely watched in the industry.”
7. Dr. Marcus Schmalbach, CEO at Ryskex
“Providing proof that the blockchain technology is not just hot air and a trend [is going to be important]. The startups and the well-known companies of our industry must deliver scalable, innovative, blockchain-based models and solutions, not just the existing solutions enriched with the blockchain.
I see the trend in parametric solutions for risks that are difficult to insure and the claim adjustment has been very time and cost consuming so far. A further approach is support for international and / or syndicated insurance programs.”
8. Satadru Sengupta, CEO and Founder of Halos Insurance
“Faster processing thanks to blockchain based authentication (as opposed to high friction manual investigation) [is a trend to watch].”
9. Stan Nazarenko, CEO of Piprate
“I'm expecting to see several new products appearing on the market that use blockchain as a backend technology. It will shift the conversation from questions like “should we use blockchain?” to “do we like this product?” Rather than being industry disruptors, these products will most likely be examples of collaboration with established industry players.”
10. James Song, Team Lead at Shadow Foundry
“Machine learning is changing how we understand data, and using machine learning with blockchain will improve pricing and reduce fraud. For instance, it's possible to dynamically price insurance based on the time of year or weather patterns. These are things we could never do before the advent of cheap computing power, which drives machine learning.”
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