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Blockchain To Become A Major Technology For Insurers: Accenture
According to an online post on Accenture’s Insurance blog, blockchain – the technology behind bitcoin that assures the integrity of a transaction – will likely bring about profound change in the financial sector.
Abizer Rangwala, Managing Director, Accenture Insurance IT Strategy, shared his views on blockchain technology in a blog post titled, “Will blockchain be the same “bust” as the Internet?”. He said that while bitcoin has gotten a lot of attention since its launch in 2009 as an international digital currency, it is the underlying blockchain technology that will likely have the most impact.
Rangwala believes that blockchain will continue to gain momentum and have deep effect on business – something that is already happening in retail and banking. He adds that insurance sector too is slowly figuring out the true use cases of the blockchain technology.
“I have no doubt that within the next few years it will be a major technology in the insurance ecosystem”, he said.
However, he added that the effect of blockchain for insurance products is not much clear at the moment and will likely take longer to emerge than for banking. The speed and ease with which contracts could be changed and the time-stamping feature of blockchain could facilitate individualized contracts that reflect actual risk.
Rangwala said that the technology could be crucial in creating and managing large layered commercial insurance programs where different organizations assume separate layers of the risk. It could also be used to manage insurer-reinsurer transactions.
He sees another development in affinity group or P2P (peer to peer) social insurance mechanisms that take advantage of blockchain contracts to bypass insurers and fund their own coverage pool. Here, the role for insurers could be quite specialized in areas like risk management and complex claim handling, Rangwala added.
Pointing out the “real” advantages of the technology he said that the blockchain offers high security as it a distributed database that makes it difficult and prohibitively expensive to unilaterally edit. The blocks provide transparency and record the history of a particular contract or deal. Moreover, dealings are more direct and contracts or transactions can be done more quickly and less expensively than conventional business dealings.