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Why Blockchain Could Enable a True P2P Insurance Model

p2p, insurance

There are already many examples of how blockchain could impact the banking industry, especially payments services and security and commodity trading. In the insurance industry it is Internet of Things, big data and crowdfunding that are widely described....

....n the new business model, the focus of the insurers would shift away from asset management and instead would focus on matching supply and demand and to risk calculation research. The insurer would provide a marketplace-like platform where customers can post their insurance demand, which could be either a standardized product or even a specific demand....

...By acting as the provider of the marketplace and the risk intelligence, insurers gain a number of benefits. The capital needed to insure the customers remains at the investors, so the insurer, in turn, can operate with minimal levels of capital or even become completely capital-free.

With regards to regulatory licenses, similar models in the P2P lending business don't need a full license or even a license at all, just an exception from the regulators. As for the development of the platform, this could (and should) be outsourced to a third party on a pay-per-use basis, making the company even more "capital agile".....

...This model could give the customer the possibility to post demand for very specific insurances in an easy way, and the payment of the insurance can be guaranteed due to the smart contracts.....

....Of course, there are various challenges in this model, some of the most urgent would be whether regulators allow the market to operate with these new efficiencies....

...But, all in all this business model could be very interesting, and it could bring multiple benefits, creating a true P2P, crowdfunded insurer. One can even argue that, should this model develop fully, we might no longer have a traditional insurer, but instead, an intelligent capital trading house that fulfills this essential market role.....


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