The Risk Management in a Digital World Working Party undertook an industry survey in December 2017 to better understand the views and activity in relation to insurtech, along with the practice and capability in assessing risks emerging from insurtech. Out of a number of “hot topics” in the context of digital innovation in the insurance industry, blockchain was identified as a subject matter that respondents were least comfortable explaining to a colleague. This highlighted a lack of understanding of blockchain, and the associated opportunities and risks.
The objective of this paper is to provide a practical guide to blockchain in the context of solving insurance business problems. The paper is divided into three broad sections. Firstly, the paper covers an education piece to provide an understanding of the technology and what sets it apart from existing solutions.
This is followed by examples of real-world applications and use cases in the insurance industry to illustrate the capability of the technology. The working party has also considered the risks and challenges of adopting the relatively new technology.
Finally, the working party has used its “Guide for Risk Considerations During the Innovation Journey” in order to create a checklist of issues to consider in adopting a blockchain solution for insurance business problems. The checklist represents a suite of issues to consider at each stage of the adoption journey, phrased as questions. These are mapped to components of a typical enterprise risk management (ERM) framework.
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