Other parts of this series:
Imagine a day when blockchain technology is mainstream. Will your organization be be prepared?
Insurers know blockchain is coming, but many don’t know how to prepare for the changes it will bring across the industry. Below are four steps insurers can take to equip themselves for rapid blockchain adoption.
1. Discover – 6 months
Form a blockchain advocacy group consisting of senior leaders within the organization’s technology and business divisions. Since blockchain technology is emerging and many people have little to no understanding of it, the advocacy group will be dedicated to education and connecting relevant parties from technology and business. They will have a mandate to create awareness about blockchain technology, showcase the latest blockchain innovations and highlight its potential benefits. Ultimately, advocacy will help gain buy-in within individual enterprises and across organizations in partnership.
Additionally, with a clear idea of the organization’s strategic goals, the advocacy group will be charged with proposing blockchain-based use cases to meet strategic objectives. The group will consult with a wide range of stakeholders and subject matter experts from both inside and outside the organization to thoroughly understand objectives and evaluate whether blockchain-based solutions make sense.
2. Explore – 1 year
The next step for carriers is to explore the feasibility of opportunities within their organizations and with other business partners depending on the model they choose to adopt. This will be done by streamlining the list of use cases from the discovery phase above and picking a few to test.
In this phase, insurers and their business partners will collaborate to create proofs of concept (POC) and prototypes addressing their use cases in dedicated labs or controlled environments. They will deploy these POCs within a closed user group environment, with specific user profiles and user privileges, while maintaining strict governance over data accessed by users.
Upon the completion of these POCs, the carriers will assess the viability of blockchain technology within their organizations with respect to the selected use cases. The results of the POCs will aid in identifying the potential benefits, risks and challenges, which will be articulated formally in the form of a business case for proceeding with the expansion of blockchain.
3. Assess and scale – 3 years
With the results of the POCs, insurers will have the opportunity to assess the impact of blockchain on the industry’s core business and review how the technology may affect doing business with existing partners across the value chain. If the impact is likely to be significant, their investment in building prototypes will have prepared them to take advantage of the technology.
To scale the technology beyond the POC stage and to integrate blockchain into their core systems, insurers will need to identify partners and/or ecosystems with symbiotic benefits to achieve the network effect necessary for the solution to be effective.
As with any new initiative, they will need to develop a comprehensive roadmap and strict timelines based on the results of the prototypes. Other issues to be considered here will include legal and regulatory matters, target operating model, infrastructure, data and process standardization.
4. Future – 3 years and beyond
The goal for insurers will be to become a “blockchain-native,” to implement blockchain as a mainstream technology and to establish it as the standard for IT development in the insurance industry.
The future belongs to organizations that embrace blockchain.
If you’d like to talk about the steps your organization can take to prepare for the day blockchain becomes mainstream, feel free to reach out to me directly. Or register to download Unblocking Blockchain: Unlocking the Value of Distributed Ledger Technology for Insurers.