Brokers need to move fast to define their blockchain strategies and deploy this emerging technology to improve efficiencies and seize business opportunities.

Having shown in earlier posts why blockchain-enabled smart contracts are potentially so valuable to leading brokers, I’d like to wrap up with some ideas about where brokers can get started. Brokers must consider the technology as part of their wider digital strategy and vision. They should define a plausible business case which explores the following key considerations:

  • Delivery: Smart contracts are cutting-edge and, to date, have not been combined with blockchain on an industrial scale for insurance. The holistic impact of blockchain must be worked through internally to understand the impact on delivery models, ways of working (e.g., Agile and DevOps) and skill sets (e.g. data and analytics, and cloud).
  • Investment: Despite leveraging open source technology, blockchain comes at a price. Research and development funding will be required to upskill existing capabilities.
  • Buy-In: Blockchain-enabled products and services must be sponsored and championed at an executive level to ensure they are not seen as just another fad.
  • Governance: Robust yet flexible governance and change management must pave the way for a “fail fast” culture that can quickly develop innovative products and services.

Brokers must make a distinction between internally and externally focused solutions. Blockchain can be used to aid internal operational efficiencies to drive cost reduction within the constraints of an organization, or it can be used as part of a wider ecosystem of business partners that provide mutually complementary benefits. Internal and external use cases can be complementary and developed in a modular fashion, or can be mutually exclusive. External use cases will likely require greater focus, as brokers will need to look beyond their organizational boundaries in order to:

  • Gain a clear perspective on how to monetize blockchain-enabled smart contracts in the wider ecosystem – identify where the value is – and share, distribute and measure created value in a way that generates mutual benefit to facilitate the continual growth of the ecosystem;
  • Acquire and harness the digital know-how (e.g. APIs, big data etc.) required to create and engage in newly defined ecosystems;
  • Identify and engage with like-minded industry players that have complementary capability and share a blockchain-enabled vision. Partnerships are often the quickest way to build a new capability.

Once brokers are clear on their blockchain strategy and vision, they can explore the selected use cases in a real-world environment. A proof of concept (PoC) provides a “fail fast” way to investigate the feasibility and value of a solution in a controlled and focused manner. If proven successful, the PoC can move into a “productionize” phase which allows the broker to iterate and scale the solution beyond its original scope. Blockchain will evolve at a rapid pace over the coming years. Brokers must quickly define their blockchain strategy and priorities to avoid being left behind. To learn more, download this report:

Using blockchain to get ahead of the game.

Read how commercial insurance brokers must assess the use of blockchain technology as a foundation to embrace the next big thing – and get ahead of the game.

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