Blockchain For Dummies, IBM Limited Edition, equips you with an understanding of what blockchain is, how it works, and how it can enhance your business and the industry in which it operates. You learn the fundamentals of blockchain and how this technology will revolutionize transactions and business networks.
[This is a multi-part series covering blockchain technology and its transformative impact on the insurance industry. In part 1, we reviewed the WHY and WHAT of blockchain. In part 2, we discuss smart contracts and their implications on the entire insurance value chain.]
The concept of smart contracts dates back to 1994, when Nick Szabo – a cryptographer widely credited with laying the groundwork for bitcoin – first created the term “smart contract.” A smart contract is essentially a computer program set up with all the conditions agreed to by the parties involved and can automatically execute the terms of a contract. Like normal contracts they help you exchange money, property, shares, or anything of value but do so in a transparent, conflict-free way while avoiding the services of a middleman. For example, pharmaceutical and medical device companies have used software programmed with a contract’s conditions to monitor ERP and other systems and issue rebates and chargebacks depending on their sales channels meeting or exceeding certain conditions.
[This is a multi-part series covering blockchain technology and its transformative impact on the insurance industry. In part 1, we review the WHY and WHAT of blockchain. In part 2, we discuss HOW this new technology can potentially revolutionize insurance.]
Like many articles touting to explain blockchain, it would be easy to just dive straight into the technology, but that would be a disservice. It would not address the larger question of “Why” – Why is blockchain suddenly so hot? Why is it being touted as the next “Big Thing”?
It’s being called the biggest technological breakthrough since the Internet.
Blockchains are the Internet protocols for allocating scarce resources. By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for digital currency, the tech community is now finding other potential uses for the technology – including insurance.
Blockchain technology can change the way insurance companies connect with customers. This will have broad impacts on distribution, fraud prevention, underwriting, and claims; Blockchain can also improve efficiencies and drive down the cost of transactions.
Marik Brockman, Vice President Strategy & Innovation, CSAA
Mega trends including changing economies, demographics, customer expectations and values, and emerging technologies such as mobile, big data
Andrew Rear , Chief Executive, Digital Partners, Munich RE
As an industry we don’t design for our customers, we design for ourselves. That has to change. We have to learn to design for how customer see their needs, and how they live their lives. InsurTech startups understand that and by working with them we can accelerate our ability as an industry to make insurance something people want, something that is relevant, accessible, and easy to use.
