Some lawyers and insurance professionals are still getting up to speed on “blockchain” – the technology that allowed bitcoin and other cryptocurrencies to develop, and that many experts say has much greater potential to change the way the world does business.
Financial services experts have been watching blockchain for years, realizing its potential for disruption and innovation. Many of the big names in the industry formed a consortium in late 2015 to research and develop blockchain technology for the financial services sector. That consortium, R3, has led to the creation of a blockchain-inspired distributed ledger platform specifically for the financial services industry.
Now blockchain is coming to the insurance world. Recently, American International Group (“AIG”) and IBM announced the development of a “smart” multi-national insurance contract using blockchain technology, and several industry-leading insurers and reinsurers have launched the Blockchain Insurance Industry Initiative (B3i) to explore the potential for blockchain to lower costs and improve the insurance experience. The Bitfury Group, a U.S. technology company, has also announced a strategic partnership with the Risk Cooperative to develop uses for blockchain in the insurance brokerage market.