Application of blockchain technology is feasible in the insurance sector, thus authorising data transmission, preventing fraud, enabling automation, and safeguarding audit trails. The present study aims at understanding the use cases of blockchain in the insurance industry and examining the challenges and opportunities of blockchain technology in the insurance industry. This study is approached from a theoretical perspective, and literature search strategy was performed for all working and published research articles and book chapters indexed under different databanks (e.g., CEI, Google Scholar, IEEE, Research Gate, Web of Science, etc.). Only articles accessible in English and published between 2010 to 2021 are included in the study. Blockchain is gaining ever-increasing attention from various industries and research domains. A quantum leap in skills and technical know-how influences all segments of industries, and this revolution is absolutely necessary in the field of insurance. Thus, the implementation of blockchain in the insurance sector has turned out to be a default platform.
TopIntroduction
Blockchain is a technology that supports tamper-resistant and transparent transaction recording. A blockchain serves as a distributed database which maintains records secured by cryptography and governed by a consensus algorithm (Flovik et al., 2021)
Blockchain technology was first introduced in 2008 to document immutable and verifiable data records in the absence of intermediaries. According to Kar and Navin (2021), “The first potential application of blockchain is its use in the transaction of bitcoin, the first-ever cryptocurrency”. The inquisitiveness and evolution of blockchain was majorly determined by the upsurge in cryptocurrency and huge investments in blockchain related start-ups. The potential application of blockchain technology was diffused to various areas such as health, insurance, finance, education, supply chain, etc. (Thake, 2018). Thus, the market share of blockchain technology is increasing significantly. Blockchain technology introduced modern and novel prospects for firms and companies to enhance their competitive edge and uplift economic progression.
Quantum leap in skills and technical know-how influence all segments of industries and this revolution is absolute necessary in the field of insurance industry. Protecting uncertainties has always been a complex and multidimensional obligation that is associated with numerous aspects of lives. Therefore, insurance industry is observed as a foremost player in handling present-day economies on their development pathway. Crawford et al. (2018), inferred “In 2017, the gross premium of global insurance industry was amounted to be $ 4.8 trillion”. Hence, monetary investments, firm size, management possessions and protecting commercial risks exhibits the importance of insurance industry.
A significant development is witnessed in the area of research associated with blockchain technology in insurance sector, but a large proportion of research is majorly focused to key determinants and consequences of blockchain technology (Raikwar et al., 2018; Janssen et al., 2020). According to Oberoi and Kansra (2021), “The espousal of blockchain in insurance industry is developing very quickly and it has been putative to become the default platform for complete insurance industry in coming future”. Blockchain technology possess the capacity to develop and enable insurance industry with new tools to redesign products and business models (Brophy, 2019). According to Tasca (2021),
Technology-related challenges in insurance industry are addressed by blockchain empowered solutions. If these new properties provided by blockchain can be combined together, it will be very beneficial for the insurance industry.
Therefore, this study aims at understanding the use cases of blockchain in Insurance industry? What are the challenges and opportunities of blockchain technology in Insurance?
TopMaterial And Methodology
Literature Search
The literature search strategy was performed for all working and published research articles and book chapters indexed under different databases viz. Academia, EBSCO, Google Scholar, Research Gate and Web of Science. Moreover, for enhanced literature search available online libraries were searched such as “Institute of Electrical and Electronics Engineers” (IEEE) and “Computerized Engineering Index” (CEI). Supplementary articles were scrutinized and investigated by conducting backward referencing process.
The literature search strategy applied a combination of controlled vocabulary and keywords such as “Blockchain Technology”, “Cryptocurrency”, “Hash”, “Nodes”, “Indemnification”, “Insurance”, “Systematic Review” and “Decentralized Ledger”. Both vocabulary and syntax were accustomed across various databases. A total of 117 articles were attained comprising duplicates by performing desk search criteria in various databases. Later, manuscripts were recognized to be duplicate and removed.