The blockchain to redefine insurance
By Insurance24
HARARE, Cryptocurrencies like bitcoin have become all the rage with people viewing them either as an investment opportunity or a bubble waiting to burst. However, the technology on which these are built, the blockchain, holds significant promise for insurance. Jonathan Jardim, senior software developer at SilverBridge Holdings, takes a closer look.
The blockchain is a digitised, decentralised, public ledger of all cryptocurrency transactions. This continuously growing list of records are linked and secured using cryptography, making it virtually unhackable. Deloitte published this example of how blockchain technology can be used:
You (a “node”) have a file of transactions on your computer (a “ledger”). Two government accountants (let’s call them “miners”) have the same file on theirs (so it’s “distributed”). As you make a transaction, your computer sends an e-mail to each accountant to inform them. Each accountant rushes to be the first to check whether you can afford it (and be paid their salary “Bitcoins”). The first to check and validate hits “REPLY ALL”, attaching their logic for verifying the transaction (“Proof of Work”). If the other accountant agrees, everyone updates their file.
Insurance shift
So, what does it mean for the insurance industry? For one, it effectively cuts out the middleman linking the insurer directly with a customer. There is no need for an intermediary to act on behalf of either party as the stakeholders have direct access to information on the blockchain. This greatly improves the speed of transactions (real-time) and reduces the cost (no need to pay extraneous parties in the process).
Moreover, the blockchain can reinvigorate the claims process for an insurer. Gone are the days of submitting a claim and waiting for days (if not weeks) for it to get approved. The blockchain acts as an enabler that facilitates the processing of claims verification almost instantaneously. Because the public ledger cannot be altered, it greatly reduces the risk of fraud taking place or inaccurate information being processed. And only people with the right permission can gain access to view the data specific to an insurance claim so the potential for human error is also virtually removed from the process.
Secure environment
Because the blockchain is built on a transparent environment, it lends itself perfectly as a vehicle of trust. It results in the development of Smart Contracts where information is recorded and verified in the blockchain. Once a claim is submitted, the blockchain can ensure that only valid ones are paid out. If multiple claims or fraudulent details are submitted, the blockchain will immediately be able to identify and reject it without any intermediary intervention required.
It also eliminates outdated and inefficient systems. With information easily shareable, greater insight to data provided, and security integrated with every step of the process, the insurer (and customers) have access to a unified system for buying and selling policies as well as paying out claims.
Even medical records can be secured on the blockchain and shared between healthcare providers without ever having to go through a human process.
The blockchain is a significant disruptive force in the market today. But if an insurer is looking for a fast, secure, and effective environment to drive business growth, it provides the perfect path to do so. Blog..Silverbridge
Digital insurance company raises $83 million in funding round
By Insurance24
HARARE, Next Insurance, a digital insurance company for small businesses, has announced that it has raised $83 million in a Series B funding round. The round, led by Redpoint Ventures, will enable Next Insurance to continue its expansion throughout the country as a full-service insurance carrier.
The company said that the funding would also allow it to push boundaries for handling claims, offer coverage to many more classes of business, and grow internal operations in both the United States and Israel.
The latest funding round brings Next Insurance’s total funding to $131 million in two years. Other investors participating in the funding round included NationwideInsurance, Munich Re, American Express Ventures, Ribbit Capital, TLV Ventures and Zeev Ventures. Elliot Geidt, managing director of Redpoint Ventures, will join Next Insurance’s board.
“We are at a monumental turning point in our company’s history,” said Guy Goldstein, CEO and co-founder of Next Insurance. “Our exponential growth over the last two years has proven that small businesses have been overlooked and underserved by the insurance market.
Gone are the days of complicated, unreadable policies, exclusions that leave entrepreneurs vulnerable, and endless meetings and phone calls with insurance agents who don’t understand the nuances and needs of different classes of business.
Small businesses are the backbone of the US economy, and they deserve insurance policies that are simple to access, affordable to own, and which provide them the support and confidence they need to thrive. Our goal is to become the one-stop shop for all small business insurance needs, no matter where they are.”
The closing round comes after Next Insurance’s announcement of its new status as a national carrier. The company is currently a licensed carrier in Delaware, Oklahoma, Arizona, North Carolina, Texas, New Mexico, Maryland and Utah, and is in the process of expanding to all 50 states.
Insurance group lauds passing of international insurance standard bill
By Insurance24
HARARE, The Independent Insurance Agents & Brokers of America (IIABA) has praised the House of Representatives for passing a bipartisan bill that aims create safeguards for federal officials taking part in international insurance negotiations.
The bill, dubbed as the “International Insurance Standard Act of 2018,” is co-sponsored by Reps. Sean Duffy (R-Wisconsin) and Denny Heck (D-Washington).
“With such an interconnected world, it is critical to approach negotiations with consistency and to not undermine our current state-based system,” IIBA senior vice president of external, industry & government affairs Charles Symington said.
The legislation requires current US insurance standards to be the objective of anyone representing the country in negotiations. US negotiators are also required to closely consult and coordinate with state insurance regulators throughout the negotiating process.
“The Big ‘I’ [IIABA] thanks Reps. Duffy and Heck for their leadership on the legislation and is grateful for today’s House action on this common-sense legislation,” said Symington. “We look forward to continuing to work with Congress to strengthen and modernize the state-based insurance system.”
The IIABA represents a network of approximately a quarter of a million agents, brokers and their employees in the country across all lines of insurance.
