Lloyd's explores the use of blockchain to modernize the insurance industry's operational processes

The old insurance organization, Lloyd's, started in 2015 with the use of blockchain to modernize the traditional insurance industry's operational processes. The blockchain is considered by Lloyd's as an important tool to get the insurance market out of paper and to be centralized.

At present, Lloyd's experiments include a blockchain-driven trading room and a chain of insurance market alliances with tokens as a bridge. A blockchain-driven trading room allows international insurers to participate in sub-underwriting and reinsurance transactions over thousands of miles away, sharing documents securely and without the need for neutral intermediaries to record them. In addition, blockchain can also be used for insurance tracking, property insurance, personalized insurance contracts, and automatic implementation of smart contracts.

Insurance companies have both complex products and simple products, the future blockchain may be the first in a simple product to better improve the efficiency of insurance operations, mainly include the following two aspects:

(1) Improve the efficiency of underwriting claims and make claims payment smarter.

Blockchain is a smarter database that automatically uploads information about the health of the individual in the future, such as an accident record, to the blockchain, so that insurance companies will be able to obtain their true risk profile at the time of insurance, thereby reducing underwriting costs and increasing underwriting efficiency. In the event of a car accident and other risks, the traffic police may record the actual traffic accident in the blockchain, while the insurance company can directly pay compensation to the insured's wallet through the smart contract.

(2) The point-to-point mutual insurance platform becomes the future insurance trend.

Blockchain point-to-point features are ideal for mutual support platforms. A specific situation is written to the blockchain programmatically through a smart contract, triggering a series of subsequent actions when certain conditions occur. In mutual insurance, for example, when one person Chuxian, the other person automatically pays the payout. At the same time, the sharing and transparency of the blockchain reduces the asymmetric information, thus reducing the risk of adverse selection. The traceability of blockchain history can also help reduce moral hazard, which will reduce the cost and difficulty of mutual insurance management. In extreme cases, the role of insurers will also gradually be transformed into professional consulting and reciprocity pool mechanism management rather than taking risks directly.

Lloyd's explores the use of blockchain to modernize the insurance industry's operational processes