Discovering Insuretech: Blockchain Disruption of the Insurance Sector

As Cointelegraph previously reported, research firm MarketsandMarkets in 2018 projected that the value of blockchain components in the insurance market will see a compound annual growth rate of 84.9%, reaching $1.4 billion by the end of 2023.

A 2019 insuretech-specific report by KPMG noted that blockchain was not a "Buzzword" or "Future innovation" for the insurance space but that it is already operational in flight delay and lost baggage claims systems and is expected to improve other risk domains such as shipping and, somewhat more remotely, health care.

A 2018 World Insuretech Report put together by a consulting firm Capgemini and fintech industry association Efma named blockchain one of the technologies set to disrupt the insurance business, alongside artificial intelligence, drones, wearables and robotic process automation.

Hartford's Insuretech Trends report observed that insurance companies already utilize blockchain technology to "Streamline processes, provide transparency, and enhance security," as well as for data management and protection, reducing administrative costs and boosting consumer trust and loyalty.

All in all, there seems to be a host of actual and potential improvements associated with blockchain implementation in the insurance industry.

A startup called fidentiaX, branding itself as a marketplace for tradable insurance policies, seeks to expand this niche by offering a platform for buying and selling tokenized insurance contracts.

In this sense, the disruption that blockchain will bring to the title insurance business is just another facet of a more general disruption of the entire title record-keeping process.

Several months ago, two major players in the U.S. market, First American Financial and Old Republic Title Insurance, joined forces to create a blockchain-based network of title insurance underwriters designed to enable industry participants to exchange previous insurance records.

Insurance firms typically rely on several reinsurers at once, creating the need for multiparty data exchange - fertile soil for blockchain to step in and streamline the complex web of interactions.

In October 2016, five major European insurers teamed up to form the Blockchain Insurance Industry Initiative, or B3i.