It’s the fate of technologists and gadget geeks everywhere: extolling the virtues of a 4k UHD TV set or the latest Skype for Business software release onto deaf ears and then out of the blue a year later the call from your sister, “at the picnic last summer you mentioned drones, Jimmy wants one for his birthday, which one’s best?”, or the email from the Finance Director: “I’ve heard clouds save IT spend. Should we get one?”
Blockchain is the current technology mot du jour. And as such there is a small number of people getting excited about it and expecting that their cried of “it’s the biggest thing since the internet” will fall on the usual half-deaf ears. But this time it’s feeling a little different; a far broader set of people seem to be paying attention.
The topic of blockchain has come up in a broad range of discussions with brokers, carriers and service providers over the last few weeks. In most cases the term elicits a slightly disinterested “what is it?” However within just a few minutes of explaining that here is a technology that offers the potential for low-cost, highly secure sharing of information the interest levels start to grow, and the emails asking where people can find out more then start to arrive. Here we have a relatively new, apparently geeky technology idea which is somehow managing to capture the attention of non-techie, non-geeky business professionals.
So, the question thus becomes how to satisfy this business “pull” for more information with the “push” of insight, training, problem-solving that is required to start reaching initial answers on the role of blockchain in insurance.
And here the news is good too; the number of events and articles on blockchain in insurance is growing almost as rapidly as Adele’s album sales. It’s not, on the whole, insurance technology providers who are driving this, but companies who have been at the heart of the blockchain debate in FinTech and other industries, as well as some of the more cutting-edge InsTech thinkers.
At the forefront of thinking sit companies such as Z/Yen and B9lab. Z/Yen has pioneered the thinking on distributed ledgers since the ‘90s and is working with a range of clients as to the potential impact insurance (their 2014 paper with long finance remains – a year on – one of the best primers on the topic). B9lab has moved from a focus of how FinTech and legacy banking systems work together to advising, developing and education on blockchain.
While blockchain is very front of mind in various areas of banking the applications are far wider with the recent example around diamond tracking by everledger capturing the press’ attention from the Business Insider to the FT via dedicated blockchain sites such as coindesk. And everledger’s ambitions don’t stop at diamonds – “Diamonds are just the start” says Leanne Kemp “combating counterfeiting is a 1.7 trillion [opportunity]”. Any item that could have an asset number could have its whole history tracked immutably in its personal blockchain. The limit is simply one’s imagination – one recent idea of using blockchain to guarantee the provenance of north Pacific salmon may not yet be economical, but it’s only a matter of time. An initiative called #blockchainfutures is in the process of crowdsourcing ideas – though unclear at present whether people are effectively handing over their IP.
The nascent blockchain thinking in the insurance space is primarily around the policy document and any attaching claims, but others are looking at it differently. For example a blockchain for a car would record not only the (change of) ownership but also details of any accidents it had been in and how the insurance had handled that. With the excellent introduction to the topic by Professor Michael Mainelli at Lloyd’s recent FinTech/Instech event, it will be interesting to see the directions the industry’s leading thinkers start to take the concept.
The technical aspect of blockchain and its initial synonimosity with bitcoin create a natural if unnecessary delay to many professionals engaging. As such there is attention being paid to education on the topic, with greater and lesser specific relevance to the Insurance professional. New Finance’s Eddie George has combined with B9labs to run a Blockchain Foundation training, while Z/Yen is running several crash courses on the topic. In the London Instech group we briefly stated our plans for a Q1 open session and are now constantly being asked for date details.
Ever aware of what’s on the minds of their readers we are seeing the insurance press start to touch on the topic more – though frustratingly for multi-industry suppliers without subscriptions articles such as PostOnline’s “Benefits of blockchain championed to slow starters in the UK” remain out of reach.
As organisers and speakers engage with zeitgeist events such as Insurance Times’ April 2016 Innovation and Disruption conference, both of The Insurance Network’s TINTech events, and the various ACORD innovation sessions will increasingly include mention of blockchain in the way we have got used over the last 12 months to everyone touching on Cyber and on the Internet of Things.
Similarly, the commentators are increasingly covering the topic. Gary Nuttall is at the forefront of the thinking in the Lloyd’s market; AXA Ventures’ Minh Tran wrote a good summary of the mention of blockchain at the Lloyd’s event on his blog The #fullstack #VC; while Daily Fintech’s Rick Huckstep is blogging voraciously on both blockchain and InsTech so it’s only a matter of time before be combines the two.
As a next step InsTech London is co-ordinating a meeting of experts in London on Monday 30th of November. On the back of that we’ll have a more detailed view of where the next few months will take us. More soon!
Paolo Cuomo @pgc_at_work
InsTech London 