Other parts of this series:
Partnerships are the key to unlocking DLT’s value
We’re seeing a surge in industry investment in distributed ledged technology (DLT) and blockchain projects as insurers look to unlock the potential of the technology. According to one research report, the market for blockchain in insurance is expected to grow from $64.5 million in 2018 to $1.39 billion by 2023— a compound annual growth rate of 84.9 percent.
Accenture research also points to eager adoption among carriers. In the Accenture Technology Vision 2019 survey, more than 80 percent of insurance executives reported that their organizations have adopted DLT across one or more business units or are piloting or planning to pilot the technology.
Another Accenture study, conducted with the World Economic Forum, found that 65 percent of insurance executives agreed that their organization must adopt DLT to remain competitive. But behind those impressive numbers, we are also seeing the first glimpses of DLT’s industry value.
Numerous insurance projects are moving beyond proof of value and entering or nearing production—The Institutes RiskStream Collaborative™ (formerly known as The Institutes RiskBlock Alliance), Blockchain Insurance Industry Initiative (B3i), and Insurwave are some examples. Over the next two years, these initiatives will refine their products while even more DLT insurance projects can be expected to go into production.
Several factors are converging to accelerate industry adoption of DLT. The first of these is the growing maturity of software platforms such as R3 Corda and Hyperledger Fabric, which are now ready to support production-grade DLT solutions. Secondly, carriers are looking to DLT as a means to unlock efficiencies against a backdrop of slow or flat industry growth forecasts.
The final—and arguably most important—reason is that industry players are embracing collaboration and partnerships as the best opportunity to unlock the value of DLT. Because they believe DLT could potentially shift the cost curve through revenue growth and cost reduction, they are urging partners, customers and others in their ecosystems to align behind the technology.
This sets the scene for the industry to drive significant value from DLT in the years to come.
My third post in this series will delve deeper into how DLT will benefit insurance carriers when it is treated as a team sport. Until then, you can find out more by registering to read The blockchain breakthrough in insurance.