Block chains can make the insurance industry more transparent


nnnThe insurance industry has given rise to some unique concepts, but the current complex market situation, especially the global market situation, poses a threat to these excellent concepts. But the use of block-chain technology, the insurance industry to provide a reputation and credibility based on the reconstruction of all the unique opportunities for the value chain.n
nnTranslation: Annie_Xun
nEdward Lloyd’s main achievement was the commercialization of the insurance industry and the establishment of Lloyd’s, the company of the same name, 330 years ago, tracing the concept of risky (or risk-sharing) back to a long time ago.n
nBefore Lloyd’s was founded hundreds of years, Chinese merchants packed high-priced goods on multiple ships, transporting the same proportions of goods. So that a single loss will not be too great. This risk is of course to prevent traders from taking away their goods on their merchant ships and avoiding other traders; for doing so will bring great losses to themselves. In fact, their vital interests tied to them, and now has been the difficulty of modern finance. 1686 Lloyd’s in London Cafe was born and to the earlier, the global insurance industry has been an excellent reputation of the industry, today remains the same.n
nSo the chain-chain technology and other trust and efficiency engine has the potential to drive the huge changes in the insurance industry, while improving the transparency and results of the entire value chain. Block chain enthusiasts said that intermediaries or “trust brokers” do not have to be eliminated, or to intervene. They can become early users of block chain technology. Indeed, this shift is most difficult for the industry’s traditional giants because it requires less pleasant transparency and price adjustment in its business model. Especially for the small difference in the industry sector, consumers in these places are often based on the choice of prices, such as car insurance, life insurance and homeowners insurance. But even these items can be innovated and survived.n
nThe block chain is a virtually irrevocable record of the time stamp in the book, which has a great impact on the world. So compared to the basic technology, like the early 1990s, the Internet. As with all similar innovations, global standards are underway. As with all standards, the interpretation of powerful new technologies is part of the industry, such as the Global Blockchain Business Council, but most of them are in the hands of a bold leader who does not see the technology as Threat, but the source of competitive advantage, efficiency and security.n
nWhen you buy insurance for a family or a large complex project or business, the only thing that finishes the transaction is a commitment document. The return of the policy and the lottery is the same, a claim is bad news or bad, and the other is a happy winner to apply for an award. They all depend on probability, accumulate a lot of expectation, hope, risk, and naturally have money. If the lottery bonus is not in place, the winner can recourse. And if the life insurance claims are rejected, the insured’s relatives, beneficiaries jointly asked to pay. As with all insurance, the concept of a high degree of credibility is revealed. Without a good reputation for hundreds of years of successful, slow claims payments, the global insurance industry will be pale and weak compared to $ 5 trillion in insurance.n
nHowever, the trust of business organizations, especially financial services, reached a record low. Large banks in the center of this trust vacuum, there are scandals, such as the recent Wells Fargo (Wells Fargo) false account, trust corrosion is bad for everyone. It breeds indifference, which in the insurance companies, customers create a huge gap between.n
nThe trust broker who leads the insurance brokerage market may pull the gap between the insurance company and the customer, using market opacity and Byzantine-style practices. In this era of complex risk categories, trust, speed and security, the severity of these problems is particularly increased. For example, the company’s political risk insurance needs to be completed in one year, delaying investment and cross-border capital flows. In such a complex “trust but to confirm” the transaction, the block chain can do is not only to speed up the insurance decision, many times it is insurance.n
nThe top ten insurance brokers in the United States control the vast majority of insurance benefits, which include a lot of unwanted friction, regulatory pressure and institutional problems, and block chains can help the industry modernize. Aon, Marsh, Willis Towers Watson and other companies continue to focus on this industry, accounting for 32 billion US dollars of global revenue, the source is insurance and related services intermediary business. Risk transfer process, the scale is not important. The three major players in 2015 generated 48% of the top 50 US brokers.n
nObviously, a large part of the industry’s revenue comes from services and greedy acquisitions, but it is important to carefully observe the underlying level of the risk-shifting value chain, that is, insurance initiation, quotation, signing, policy issuance to claims and renewals Resistance coefficient and trust blank. This is the chain chain in the insurance industry to play a turning point in the power of change. While reducing friction, improve trust, can reduce the lack of insurance and do not cover the trap.n
nTo a large extent, these problems have led to underfloor insurance, the worst is that some of the risks can not be covered, through the FEMA (US Federal Emergency Management Agency) and other institutions to pay taxpayers. In California, for example, only 17% of households have earthquake insurance, although the risk is obvious, most Americans live on a monthly basis. Low market penetration is associated with a consumer misunderstanding of the chances of a disaster because of the high cost of the insurance industry and the inefficient service model.n
nSuch as the situation in the flood insurance, the moral hazard (the risk and the consequences), the insurance company and the broker’s underwriting capacity, the wrong pricing, and so on to the consumers and the government to support these projects to bring bad results. Research shows that an increase in coverage rate of 1% for consumers can reduce the accidental loss of 22%.n
nWith block-chain technology, the insurance industry has the unique opportunity to rebuild the full value chain based on reputation and trust. Such as the United States about 7.4 billion US dollars life insurance claims, so that beneficiaries can not take measures. Block-based insurance registrations can address these issues while maintaining anonymity through distributed public records and improving security. The reason for these unprotected funds is called longevity risk: longer life expectancy is that life insurance conditions are more mature and the memory of insured and insurance documents may be blurred. Block-based public books do not threaten the industry, but to achieve legitimate earnings claims, do not let these outstanding claims in the secondary market to sell or freeze.n
nBlock chains can support the insurance industry, especially the complex international market, to the site loss of the confusion of the experts to bring the verification engine. One of the reasons that insurers are afraid of securing tangible assets in developing markets is fraud and loss. In these cases, the insurance company can not implement the right of subrogation, or use other people’s assets to make up for the loss. The chain-based claims verification network can benefit the industry as a whole and record the status of insured assets on semi-public block-chain books to improve insurance penetration and utilization in emerging market segments.n
nThe insurance industry is the industry that creates risk-taking and co-op competition, and can benefit from the chain-chain infrastructure technology. Failure to take action may allow large participants to experience a vacuum of trust or even out of date.n

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