Other parts of this series:
Beyond the hype, a glimpse of blockchain’s real value
From blockchain’s early years, the insurance industry has grasped the potential advantages of a distributed ledger system that ensures consistency of data across a network. Many insurers were quick out of the starting blocks with distributed ledger technology (DLT) pilots and proofs of concept to experiment with its potential as a disruptive technology.
Yet unrealistic expectations about how quickly and easily the value of DLT might be realized, along with the cultural challenges of reshaping core industry processes, meant that the technology did not deliver the anticipated benefits. Some firms that launched pilots and proofs of concept—even successful ones—were uncertain about how to realize return on investment in a production setting.
Over the course of this blog series, I’ll be exploring why insurance organizations are emerging from this trough of disillusionment as well as how they can position themselves for success in the next wave DLT’s evolution.
Let’s start with a view of how industry perceptions of blockchain are evolving. One of the biggest changes is that insurers are beginning to look beyond DLT as an isolated enterprise technology.
Instead, they are starting to understand where DLT’s true value lies—as a catalyst for business ecosystem transformation. In much the same way as cloud computing did before it, DLT will mature into a transformational technology over the next few years. In fact, it will be one of the foundational technologies of the next wave of industry disruption.
Now that most organizations have put in place the key technologies of the digital age—social, mobile, analytics and cloud (SMAC)—the next wave of digital technologies are beginning to emerge in the form of DLT, artificial intelligence (AI), extended reality and quantum computing (DARQ). Though at different stages of maturity, these four technologies will be the key drivers of what Accenture describes as a post-digital age.
Just as SMAC enabled new levels of collaboration and connectivity between insurance companies and individual people and organizations, DARQ—DLT in particular—promises to transform entire ecosystems, markets and value chains. Distributed ledgers will expand business networks by securely connecting industry participants with ease and at unprecedented scale
To take advantage of DLT as a cornerstone for collaboration, insurance organizations should partner with others to create DLT propositions and platforms that create value for all members of their ecosystem or value chain. They have a limited window to be one of the organizations that shape the DLT platforms and solutions of the future.
Those that sit on the sidelines waiting for the tech and business models to mature risk losing the opportunity or potentially being excluded from the distributed, collaborative economy of the future.
My next post will look at some examples of the consortiums that are blazing the trail. In the meantime, you can register to read The blockchain breakthrough in insurance to learn more.