Aon study reveals ‘potential’ of blockchain for insurers
Aon, the world’s largest insurance broker and provider of consultancy services, has published a report highlighting some of the “surprising capabilities’ of blockchain technology in the insurance industry.
Stephen Mildenhall, a risk academic at New York’s St John’s University and former chief of analytics at Aon, said in a report that blockchain will “revolutionize insurance”.
“Executives everywhere must pay attention,” he said. “Blockchain is the new plastic. Or so the myth goes.”
He went on to explain how blockchain’s distributed ledger technology works: an encrypted ledger and database that could provide many functions in the industry.
“Commentators often tout blockchains as a solution to the insurance industry’s processing and back-office inefficiencies. But this is a rather narrow view,” Mildenhall said.
He added: “Blockchain technology allows us to re-democratize data and reassert the individual’s control over their private data.
“To enable this will require infrastructure and an alternative revenue model. Insurers are well positioned to provide these services … stepping in to replace outmoded and insecure centralized networks with distributed blockchain solutions.
“This revolutionary model represents the true potential of the blockchain for our industry.”
Meanwhile, Bloomberg reported on Thursday that insurance for cryptocurrency storage was to become a big opportunity.
Aon claims to have more than 50% of the market for crypto insurance, but while more than $1bn in digital tokens has been stolen from crypto exchanges this year, Aon said it wasn’t aware of any insurer that has had to pay out crpyto policy claims.
Many crypto exchanges buy insurance worth a fraction of the coins they hold, Bloomberg’s report said, as the number of exclusions on the policies make them “close to useless”.