How new technology is changing the face of insurance
A new study by BCG reveals that an insurance wide implementation of blockchain could reduce its combined operating ratio by 5 to 13 percentage points and generate upwards of $200 billion (more in technical margin from its current gross written premiums). Not a figure to be sniffed at!
AXA France is the only insurer to have launched a blockchain consumer offering.
AXA’s product, Fizzy, offers direct, automatic compensation to policyholders whose flights are delayed. If a customers’ plane is more than two hours late, fizzy will reimburse them immediately.
It does this by recording purchases of flight delay insurance in the tamper-proof Ethereum blockchain network.
This smart contract is then connected to global air traffic databases, so that as soon as a delay of more than two hours is observed, compensation is triggered automatically.
In this way, AXA has delegated the compensation decision to an independent network, which in turn strengthens the customer relationship.
There are significant blockchain products currently on trial.
Allianz Global Corporate & Specialty (AGCS) has successfully trialled a blockchain solution for a captive insurance application, including international cash transfers and Japan’s Tokio Marine and Nichido Fire Insurance and NTT Data Corporation are jointly testing a blockchain based data insurance policy for shipping.
But it’s not just blockchain that will revolutionise the sector.
In other areas machine learning-enhanced data management systems are enabling insurers to become more customer centric.
For instance, our Property Data Suite for Insurance streamlines the customer journey and enhances customer relationships.
Until now the solutions have been clumsy and ill-conceived.
However, cutting-edge data science enables us to infer and model more attributes than ever before which in turn enables insurance brands to make more tailored and detailed products and services for their customers.
It’s an exciting time to be in insurance!