The majority of those working in the UK insurance market regard blockchain technology as a game changer for their industry, reports LMMC Partners.
The London-based strategic data and transformation consultancy announced the results of a collaborative presentation with the International Underwriting Association (IUA).
The firm reports that blockchain is becoming “a pervasive topic of discussion within the insurance market”, within innovation hubs and on the C-suite agenda. However, it is still early days in terms of testing and acceptance – and in many cases discussions are immature.
LMMC and the IUA hosted a collaborative discussion in London, “How to respond to the Blockchain opportunity – A Business Perspective”, attended by participants from across the insurance market, from operations, claims, technology, underwriting, compliance and risk management and developers. Participants shared experiences and debated applications of blockchain technologies within the London and global insurance market.
Early stage blockchain applications for financial services have been operational around five years, with over 1,000 blockchain start-ups and upward of US$1bn in funding provided for blockchain applications in 2016.
“The core drivers of the move to blockchain are the possibilities to substantially reduce frictional cost, to increase the speed of processes, to provide transparency to market participants and to transform client experience with next generation technology framework,” reports LMMC.
Key concepts and potential business applications – from identity, sanctions screening, know-your-customer (KYC) compliance, policy contract lifecycle management, usage based insurance,and claims to settlements – were among the issues debated with reference to pain points currently experienced within the industry. Over 60% of participants saw the ability to meet compliance (including sanctions) requirements as a key challenge with their current processes and infrastructure.
Phil Foley, co-founder and partner at LMMC, commented: “Within the insurance market blockchain is in its infancy, but as with many interlocking financial and legal applications, looks likely to transform the way that identity, trust, transactions and customer assets are managed by professional services firms,”
Over 80% of the participants saw blockchain technology as being a game-changer for the industry. Rajen Madan, co-founder and partner at LMMC, said: “The promise of blockchain technology to re-imagine market flows is clearly seductive; however, firms should explore pilot applications against business outcomes.
“The development of the firm’s data assets and future operating models should go hand-in-hand and is a necessary precursor to success.”
By 2030 artificial intelligence will add more than US$15 trillion to the world economy according to the group’s research, but most of that gain will go to North America, Europe and Asia.
Companies are warned that they must improve their resilience, as incidents such as this week’s ‘Petya’-style attack become increasingly common.
A report by the Lloyd’s of London insurance market finds that the sector is second only to financial services as the target of attacks.