Jillian Slyfield serves as Digital Economy Practice Leader at Aon. In this role, Slyfield addresses digital disruption of traditional industries and the on-demand economy. Her focus areas are Alternative Mobility, The Future of Work and New Economy Digital Risk. She can be reached at [email protected]


Accenture reports that the global market for blockchain in insurance is expected to grow to $1.39 billion by 2023. There are countless use cases for blockchain in insurance, as it is an industry of contract execution, detailed and confidential data collection, and third-party payments.

As such, blockchain promises to redefine many roles, allowing for an elegant technology to replace tedious, error-prone and sometimes fraudulent transactions.

Verified information is core to the insurance industry, and trust is core to the credibility and functioning of the digital economy. Blockchain technology offers an opportunity for the insurance industry to rely upon a single source of truth that is secure, accurate and transparent.

To better understand, think of an online transaction that is started by an individual. A distributed network of computers verifies the individual’s identity and the data involved in the requested transaction. Once confirmed, the new transaction is added to the existing chain. This transaction is called the block, and the individual has added a new block to the chain. The blocks are permanent and immutable.

An insurance policy is a contract between an insurance company and a business or individual. We’ve seen a rise in the use of smart contracts, which is a self-executing contract that documents legally relevant events according to terms that are written directly into lines of code.

It does not take much to imagine the efficiencies that are possible when a payment from an insurance contract can be triggered utilizing verified data across all parties to the transaction without anyone from the insurance company getting involved.

With these growing capabilities, blockchain has and will continue to provide unlimited possibilities.

Life insurance is one of the first use cases for this technology because it is cumbersome to underwrite and claim processing is often tedious. According to Property Casualty Insurers Association of America and FICO, as many as 10% of life insurance claims are fraudulent causing additional friction in the settlement process.

Blockchain technology can be used to gather healthcare data from Electronic Medical Records to streamline the underwriting process. At the time of a claim, blockchain can be used to verify the death and validate key documents.

These efficiencies have the potential of eliminating fraud related to data, and significantly reducing the time it takes to pay a beneficiary. The result is cost savings for the insurance company and a better experience for the customer.

Subrogation is an antiquated, paper intensive process often resulting in countless paper check payments from one insurance company to another.

Billions of dollars are traded among insurance companies every year for this purpose. It is typically done on a per claim basis, with each subrogation payment being made individually.

Blockchain technology has been used to verify policy and claim information, determining exact subrogation payments due. Through a smart contract utilizing blockchain technology, each company totals what they owe to the other and then the delta is automatically reconciled through an electronic payment.

Over the past decade, rating personal and commercial auto policies has become increasingly sophisticated. Usage Based Insurance (UBI) written on a Per Mile basis are now commonplace.

Rating factors include data sourced from telematics devices, such as hard braking, swerving and acceleration. Contextual data may also be included, such as time of day, number of individuals in the vehicle, or weather.

Each of these factors can influence the per mile rate charged to the driver. Blockchain technology stores this transaction data and utilizes a smart contract to calculate, bill and charge premium. In the event of a claim, much of that same data can be used to adjudicate a claim and efficiently and quickly make a payment.

The insurance industry continues to see the benefits of implementing blockchain into its daily tasks and procedures. It implements a truthful check point within an organization, reducing fraud, increasing bottom lines, and enhancing the insurance experience. &





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