Blockchain, bitcoin and cryptocurrency have all been making headlines and waves around the world recently and sparking huge potential for a significant shift in the storage, access and transaction of information and data, especially in the insurance industry.
We sat down with GB’s Julian Martin, General Manager of Information and Technology Services and got a better understanding on how Blockchain technologies can support the significant digital transformation underway in the Insurance industry.
Blockchain, what is it?
A blockchain is a decentralised database or “digital ledger” used to store static records and transaction data that allows consumers and suppliers to connect directly, removing the need for a third party. This network is essentially a chain of computers that must all approve an exchange (update or addition of information) before it can be verified or recorded permanently on the Blockchain.
How was did it come about?
The first blockchain was conceptualised by Satoshi Nakamoto in 2008 and implemented the following year as a core component of the digital currency bitcoin, where it serves as the public ledger for all transactions. The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem, without the use of a trusted authority or central server.
In early 2017, the Harvard Business Review suggested that blockchain “has the potential to create new foundations for our economic and social systems.” It further observed that while foundational innovations can have enormous impact, “It will take decades for blockchain to seep into our economic and social infrastructure.”
Does Blockchain provide a positive opportunity or a threat to privacy?
Blockchain will enable new businesses and potential improvements in core business processes within industry and regulatory regimes despite significant challenges (privacy laws, regulatory approval/requirements, etc.) that need to be overcome before blockchain technologies can be widely used in the insurance sector.
As mentioned there are a number of challenges with Blockchain in regards to privacy and who gets access to what information however one of the benefits of Blockchain is that it is incredibly difficult to be unlawfully modify the information as data distributed across thousands of computers not just one or two datacentres
How will it impact the overall insurance industry?
Blockchain has potential applications across the insurance and claims management industries as it is a decentralised ledger where authorised assets and their associated policies could be registered making for easier and more efficient claims processing. Blockchain could replace existing information systems, leading to streamlined paperwork and reconciliations for insurance contracts, accelerated information sharing, faster claim payments and reduction in average claim cost related to claims administration and damage from fraud and fraud detection.
How is Blockchain relevant to Gallagher Bassett as a third part administrator?
At the moment, Blockchain is largely being investigated for use in the banking area however there are a number of case studies being undertaken by a group of insurers in Europe. Gallagher Bassett as a third party claims administrator is definitely keen to see the outcome and benefits that arise following these and leverage how we can make improvements to our business processes, simplify our integration to our clients and provide capability where it is needed in the administration process.
Julian Martin, General Manager of Information and Technology Services