Taking blockchain and distributed ledger technology from pilots to production
Insurance organizations have watched the evolution of blockchain and distributed ledger technology for several years—recognizing its potential to disrupt the industry over the longer term, yet struggling to scale their early pilot projects into successful production systems. That picture is set to change as the technology matures, along with insurance organizations’ understanding of where the value lies.
Leading insurers are seeing blockchain’s true value by looking beyond the technology in isolation. The insight that is changing the game is the growing realization that blockchain is a catalyst for business ecosystem transformation. At its core, this is a team sport that requires companies to work together to win. The more teams that play, the more value gets realized for everyone.
As the advances made by The Institutes RiskStream Collaborative and B3i show, leading consortiums are beginning to deliver value as they move into production. Insurance is one of the industries blazing a trail for using blockchain for cross-organization collaboration and enabling new business models. Now is the time to think about how you can respond to the opportunity and ensure your company is on the winning team.
Find partners that share your vision
Companies that wish to succeed with blockchain should seek other insurance organizations and ecosystems which share their vision for an important industry process, and work with them to find where there is room to create mutual benefit. Such initiatives will need to be driven by tech-savvy business leaders with the ability to bridge legacy organizations and new models of collaboration and engagement.
Two major models are emerging:
- Market Leader: This model sees an actor that is a predominant driver of network activity leading the development and deployment of the blockchain solution. The vision is to enable additional stakeholders—such as notaries, brokers, reinsurers and co-surety partners in the insurance market—to interact with each other, creating a more-connected ecosystem while ensuring confidence in the security and accuracy of the data.
- Peer networks: Formed by competitors in a similar industry, this model sees organizations come together to realize efficiency and value gains at a market-wide level. The initial emphasis is on creating a step change in efficiency for the entire value chain or market, rather than driving competitive advantage for one participant. As more parties come on board, the benefits to all will multiply.
As with the World Wide Web and cloud computing before it, blockchain and distributed ledger technology promises to bring radical change to how entire industries operate. Now is the time for insurance organizations to take a stance on how they expect blockchain to impact their business and the wider industry. By understanding the technology and its applications, they can assess the challenges and benefits that loom on the horizon.