Blockchain in Insurance

The technology behind Bitcoin is the blockchain,

a decentralized and distributed ledger of transactions
allowing collective bookkeeping in an immutable ledger.

Why should you care?

A blockchain is essentially a record, or ledger, of

digital events — one that’s “distributed” or
shared between many different parties. It can only
Evolving role
be updated by consensus of a majority of financial
of the participants in the system. And, once entered, institutions
information can never be erased. The
as trust is
decentralized
blockchain contains a certain and verifiable
record of every single transaction ever made.

Disrupt business
models focused
on extracting value
when a transfer in
value between
parties occurs

Shift in customers
expectations as
competitors set the
standard of faster
services

Given its ambitious potential to drive simplicity and

efficiency through the establishment of new financial
services infrastructure and processes, this technology is
rapidly gathering momentum within the insurance industry.

$474M
VC-backed Bitcoin and blockchain fintech
Countries investing in blockchain
investment activity

$299M

Corporations have joined blockchain cosortia

$80M

$3M
$1M

2011 2012 2013 2014 2015

R3 consortium members focused on exploring
blockchain applications in Insurance

New insurance processes and business models built on

blockchain will call into question current orthodoxies
and challenge multiple pain points that are prevalent
across the value chain.

Current pain points

Inefficient Limited UW Fraud-prone Complex liability

exchange of accuracy assessments for
information syndicates /
reinsurance

Use of Fragmented Manual claims

middleman data sources review and
processing

We believe underwriting and claims processing are the dominant applications in the
industry, with early adopters of blockchain investing primarily in these use cases.

Within underwriting, the technology can help reduce costs,

improve risk assessment, and enhance client onboarding.

P&C insurance underwriting impacts

Risk assessment Quoting Onboarding

Enable trusted and verifiable Improve accuracy of pricing Enable capture of immutable,
1 1 1
provenance information through transparent trusted, and verifiable
quantification of risk information based on
Provide transparency on existing and disintermediation digital cryptography
2 or past insurance policies and of third-party intermediaries
claims associated with property Provide fast, seamless, and
2
and/or insuree 2 Provide digital smart contracts transparent experience in
to capture obligations and terms binding policy to insurees
Enable shared interface with binding the insuree and insurer
3 trusted third-party data providers
(i.e., real state registry, notary
services, public records, etc.)

Benefits

Efficient Improved risk Automation

exchange of profiling through smart
information policy

Similarly, the technology can fundamentally alter claims

submission processes to reduce fraud and improve
customer experience.

P&C insurance claims processing impacts

Claim registration Claim assessment Payment and closure

Provide trusted and verified Provide access to validated 1 Provide automatic payment
1 1 external data through trusted to insurees through smart
submission of claim data
and/or documentation sources (i.e., oracles) contracts

Enable automated pre-assessment 2 Enable automated determination Provide immutable and

2 2
of the loss coverage against the of loss liability transparent proof of claim
policy settlement
Enable automated assessment of
3
In case of smart assets/properties, loss coverage for syndicates /
3 reinsurance
enable claim to be securely and
automatically submitted without
human intervention Enable programmable escalation
4
to human decision making in
Automate process to engage repair case of complex risks
4
and assistance providers in order
to reduce response time and
ensure use of preferred suppliers

Benefits

Simplified / Reduced Enhanced Automated

automated claim fraud loss customer compliance
submission experience and
no manual
inspection

Contact us

James Colaco Soumak Chatterjee Alex Watson Vikas Singla

Partner Senior Manager Senior Manager Manager
jacolaco@deloitte.ca schatterjee@deloitte.ca alwatson@deloitte.ca visingla@deloitte.ca

deloitte.ca

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