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The new conceptual projects in the insurance sector will have the go-ahead.
2018 saw the transition to blockchain technology prototypes of real use cases and proof of conceptual projects in various sectors of the insurance market, including: shipping, reinsurance and logistics. Most current feasible projects are platform-based and use private or authorized blockchains or similar distributed register technology. Consider this "blockchain-light" technology.
Because this new technology and light-based blockchain systems are proven, reviewed and scaled (and in some cases proved to be non-feasible) and as technology continues to mature, we expect these early engines to rapidly develop and expand this technology.
Current blockchain platforms tend to focus on administration or back-office relationships, where blockchain can offer real efficiency savings. The growth in the use of coded Smart Contracts, which automate all or part of a natural language contract, more directly through a platform relationship, is likely to become more mainstream.
On a more ambitious scale, two developments offer an enticing view of an ecosystem in which a more pure and decentralized view can become viable: attention to data sovereignty and attempts to tighten ownership and control of data; and greater interoperability between different blockchain technologies and disputed ledgers. We expect these to be the focus of new proof of concept projects in 2019, as they would allow for new insurance risks to be considered and could improve the profitability of existing risk lines.
We also believe that "tokenization" – the registration of property in digital form, which is very different from cryptographic resources and currencies – will enter the mainstream. This will provide the ability to promote fractional ownership of assets and to recognize sets of small values, which offers a way to scale new projects.
During 2019, successful avant-garde projects will generate further developments and more insurance sectors will start adopting the blockchain-based technology once they see the benefits these systems can offer.
You can read the rest of our insurance forecasts here.
