Ethereum Within the Insurance Industry
The general populace typically fears change and shies away from disruptive innovation. The old lamplighters of our past thought the electric light bulb was something born from witchcraft. And even as we have moved on, and are more open-minded, there are still some trappings of fear. However, there are always the few out there who are constantly looking for ways to innovate and reignite progression. The blockchain industry is one of those new technologies that is igniting that very fire within these progressive individuals and companies. Several banks have built a consortium to test out the blockchain to reduce trade times and mitigate the cost. Although, the banking industry isn’t the only sector that’s revolutionizing its old systems and benefitting from the new blockchain technology.
The insurance market is now looking at a revamp and hoping to reap the blockchain benefits as well. People waiting to receive government unemployment insurance (if they’re applicable) may have to wait weeks or even a month before they see a dime. This becomes stressful because while the unemployed individual may actively be looking for work, they still have their bills to pay. Dynamis is a new company that’s utilizing smart contracts for peer to peer insurance that’s built on the Ethereum platform. When a person becomes unemployed, it provides supplementary unemployment insurance by using LinkedIn to verify the claimant’s identity and employment status. Claimants utilize their LinkedIn connections to validate the fact that they are actively looking for work, therefore are able to obtain a new policy or open a new claim.
Rainvow is another Ethereum-based mobile platform that provides automatic coverage to compensate for unforeseen transportation costs on rainy days- such as taking an Uber or bus when they normally bike to work.
“Community-based insurance is possible leveraging a specific form of smart contracts called smart vows. We propose the creation of applications calling the Smart Vows Contract in the Ethereum Network to facilitate the offering and acceptance of policies (vows) among community members to hedge against unforeseen events.”
Inchain is a decentralized insurance platform that mitigates the risk associated with complete or partial loss of cryptocurrency assets due to hacks and cyber attacks. With Inchain, users are able to set their desired insurance parameters and the platform generates the appropriate smart contract to manage the insurance policy and automatically execute payments made on claims.
While it was originally a short-lived Dapp during Devcon2, the Flight Delay Dapp was another example of Ethereum pervading the insurance industry. The Flight Delay Dapp enabled automatically executing smart contracts that would benefit a traveler in case of unforeseen flight delays or cancellations.
Users simply chose their flight by selecting a destination airport, and the date of their departure. (Departure times had to be more than 24 hours in the future.) Users then applied for a policy, with the following policy applications showing probabilities of flights being delayed more than 15, 30, and 45 minutes, or canceled or diverted altogether. The user then entered the premium payment amount of Ether they wished to pay for the smart contract. A minimum of .5 ETH and a maximum of 5 ETH per policy was accepted and estimated payouts would show in case of the respective delays.
While the Flight Delay Dapp was only utilized during flights to Devcon2 in September 2016, it was meant to showcase how Ethereum can benefit real-world use cases. Other startups in the blockchain-based insurance ecosystem may also be in the conceptual phase, trying to work out relationships with other carriers, brokers, reinsurers, and more. And with these insurance providers looking at new ways to revolutionize the largest industry in the world, that insurance revamp may not be too far around the corner.