This is the third in a series of posts that breaks down our article, “Smart After All: Blockchain, Smart Contracts, Parametric Insurance, and Smart Energy Grids,” recently published in the Georgetown Law Technology Review. We previously discussed the enforceability of blockchain-based smart contracts under ESIGN and UETA and the application of blockchain-based smart contracts for simple insurance contracts. We will now examine the use of blockchain-based smart contracts for parametric insurance. You can read the full article here.

As discussed in our last post, life insurance and final expense insurance are good examples of simple “if-then” arrangements that can be digitized into blockchain-based smart contracts in relatively straightforward ways. But could other types of insurance that are currently reliant on more subjective factors be restructured into products with more firmly defined parameters, enabling their digitization and administration through blockchain’s transparent processes? Parametric insurance policies offer such potential. By pairing parametric insurance with blockchain-based smart contracts, insurers can reinvent the manner in which classes of insurance are offered.


Continue Reading

This is the second in a series of posts that breaks down our article, “Smart After All: Blockchain, Smart Contracts, Parametric Insurance, and Smart Energy Grids,” recently published in the Georgetown Law Technology Review. We previously discussed the enforceability of blockchain-based smart contracts under ESIGN and UETA and will now look at the application of blockchain-based smart contracts for simple insurance contracts. You can read the full article here.

Even though basic insurance contracts can often be boiled down to an agreement to make payment upon the occurrence of a discrete event, administration can quickly become complex. Claims adjusters are needed to assess a claim and its validity and disagreements can arise if parties later disagree about the interpretation of the terms or relied on representations outside of the policy. In addition, parties are often mistrustful of one another because of the potential for fraud, abuse, or denial of claims. In either event, insurance companies incur costs administering even the simplest of contracts, and those costs are often passed along to consumers in the form of higher premiums. However, reducing basic insurance contracts to “if-then” statements and digitizing administration would reduce the cost of administering these products and help overcome challenges of trust and transparency.


Continue Reading

In the last installment of our five-part blockchain series, we focus on the insurance industry.  Insurance and reinsurance companies are actively exploring and developing applications for blockchain technology.  And for good reason – distributed ledger technology has the potential to revolutionize the way insurance companies operate and engage with their policyholders and to open a window into new products and new markets.

At the retail level, the blockchain promises to benefit both the consumer and insurer by simplifying the claims process, increasing efficiency of underwriting and claims handling, improving risk management, and reducing operational costs.  The blockchain will help ensure the security of private or confidential information, improve auditability and transparency, and increase effectiveness in fraud detection.  These enhancements will also help lead to an improved customer experience.


Continue Reading