Transformation of the Insurance Business Model using Block Chain Technologies

Abstract

The insurance sector has been less agile to adapt to rapid changes sweeping the external economic environment. However, massive advances in technology have now necessitated the insurance sector to relook at their business processes, archaic legacy systems and IT infrastructure to explore ways and means to serve the customers better. Block chain innovations in insurance are disruptive. Advent of block chain can mean simpler processes, lower premiums, greater transparency, increased accountability, increased efficiency and possibility of niche coverages. Block chain also enables smaller firms to cover risks that were earlier covered only by large insurance firms. However, there are limitations to implementing this technology due to the heavy investments involved in implementing block chain and due to change management challenges. There is scope for strategic alliances between insurance sector and insur-tech entrepreneurs to derive the maximum value out of block chain technology.