IPEC moves to equip industry on the inevitable impact of block chain technology in insurance
Walter Mapfumo
Staff Reporter
HARARE, The Insurance and Pensions Commission (Ipec) has moved to equip the insurance industry with an appreciation of the inevitable impact of block chain technology in transforming existing business models.
The regulator will tomorrow host a breakfast presentation on Block chain Technology at the Celebration Centre in Harare which will be attended by among other people executives from the local insurance industry.
“The objective of the presentation is to equip participants with an appreciation of the inevitable impact of block chain technology in transforming financial transactions, disrupting business models, its benefits and possible challenges to existing business models,” Lloyd Gumbo, the Ipec spokesperson told Insurance24.
He said international and regional expects on block chain have been invited to make presentations. These include Eric Annan who will present on Africa and the digital economy, Greg Morris will cover the advent of block chain in the insurance industry while Garth Bell will present on strategic leadership in the block chain era. Andrew van Zyl will speak on the block chain as an enabler for growth in the insurance industry.
Topics to be covered include emergency of block chain in Africa, adoption of block chain in insurance and pensions industry, block chain and digital identity, strategy leadership in the block chain era and the 4th industrial revolution.
Meanwhile, global blockchain in insurance market is projected to grow from 2018’s US$64.5 million to US$1.393.8 million by 2023, a compound annual growth rate of 84.9%, according to a new study from ReportLinker.
A growing number of fraudulent insurance claims, increasing need to have transparent and trustworthy systems, and a focus on reducing the total cost of ownership will most likely drive the growth of the market.
The growth of blockchain as a service and the increasing penetration of the Internet of Things will also likely create growth opportunities for the market, ReportLinker said. However, uncertain regulatory status and the lack of common standards could weigh on overall growth.
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 said.
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.
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
